Jute Products Manufacturers Unflappable Amidst Crisis

The Jute industry in India is going through turbulent times and is looking for long term solutions from the industry leaders.The jute sector in India occupies an important place in our economy as it provides direct employment to about lakhs of workers and supports the livelihood of around 4 million families.

As per the last statistics available, jute exports are to the tune of nearly 1000 crore INR. So far, the government support has remained perennial, as the Jute Sector has usually been included for special attention in its policy framework.

The jute industry has usually been on a roller-coaster ride and its growth seems uncontrolled and unregulated which often reverses the good steps taken. To shed some light on the woes of the jute manufacturers, lets begin with Bengal where in the jute mills are losing Rs 900-1000 per tonne on jute bags owing to a faulty calculation made by the Jute Commissioner's office. The mill owners have claimed that between July 2009 and August 2010, the industry has lost around Rs 42 crore.

As per the news report, the mill owners are being forced to buy low grade jute at high price and sell the manufactured jute bags to the government at low prices.

It is worth noting that 35-40 per cent of the total jute bags produced in the country is purchased by the government through different procurement agencies.The Food Ministry has so far refrained from taking any decisive stand saying that that the issue is solely under the domain of the Jute Commissioner (JC), considered to be the custodian of jute industry.

In another setback to the jute industry, the Central Board of Excise and Customs (CBEC) has turned down a proposal made by the Union Ministry of Textiles (MOT) to restrict about 450 odd sugar mills across the country from packing sugar in plastic bags replacing jute bags .

This is despite the recent decision of the Cabinet Committee on Economic Affairs (CCEA) which had ruled out any dilution in the Jute Packaging Materials Act (JPMA) of 1987 that makes it mandatory for packaging of 100 per cent of food grains and sugar produced in India in jute bags.

Understandably, the jute manufactures are in deep anguish and intend to take the legal course as their sources of demand are diminishing with each passing day.

However, all is not lost for the jute exporters and suppliers as the centre is expected to finalise the much awaited ‘National Fibre Policy’ by the end of this year. That will remove the disparity in taxation and pricing of various fibres in the country.

Industry insiders say that, the proposed policy is expected to iron out the disparities in taxation structure and pricing with a comprehensive policy on exports and will help the Indian textile industry (including the jute industry) to recover its share in the global arena.

As one of the jute bags exporter sums up the whole scenario by saying that - “a lot has been said and a lot of assurances have been given, now its the time to see what exactly are they able to deliver and how soon...”

It certainly seems like a testing time, not just for the jute manufactures but also for our policy makers.

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