JUTE SECTOR IN INDIA

• The jute sector in India has been faltering while Bangladesh’s is flourishing and depleting.
• According to the third advance estimate released by the Union Ministry of Agriculture and Farmers Welfare, it has mainly fallen by over 13 per cent in the past decade about 1.77 million tonnes in 2021-22, from 2.03 million tonnes in 2011-12.
• The average area under the jute in the country was 0.82 million hectares between 2000-01 and 2009-10, according to a 2021 report by the Commission for Agricultural Costs and Prices (CACP). This declined to 0.73 million ha between 2010-11 and 2019-20.

Source - Down to earth

Comparison with Bangladesh

Production:

• While India’s production and acreage have declined on the other side Bangladesh’s production and area under jute have increased over the years.

Cultivation:

• India is still one of the largest producers of jute but in terms of acreage, Bangladesh is the largest cultivator as it also accounts for nearly 75 per cent of the global jute exports, while India’s share is just 7 per cent.

Imports:

• Even India imports jute products that as yarn, floor coverings and jute hessian from Bangladesh. In 2020- 21, India imported products worth Rs 1,123 crore from Bangladesh.
• Imports from Bangladesh had adversely affected the domestic industry, given that the landed price of jute and its products from the neighbouring country was much cheaper than the domestic rate.

Cost:

• Bangladesh has traditionally enjoyed a comparative advantage in the export of jute products because of its low cost of production which is also driven by the lower wages, favourable power tariffs, cash subsidy for export and even better fibre quality.

Infrastructure:

• It has been a sore point in India’s jute cultivation. Jute in India is marred by poor infrastructural facilities for retting, a process done after harvesting the crop.

Bangladesh Model: A Success

• Subsidy: It does well in exports because it has three to four different kinds of subsidies. For example, it gives a 9-10 per cent export subsidy for food-grade packing bags, which is much higher than India’s 1.5-3 per cent subsidy.
• Diversified Products: It’s capturing the diversified jute products market, for which there is a huge international demand. India’s major jute exports, in contrast, are sacking and hessian bags.
• High Exports: High-end fashion brands are also coming out with more jute products such as sandals. Around 85 per cent of India’s jute is consumed domestically, while only 15 per cent is exported. The situation is much reversed for Bangladesh.

The issue in the jute sector of India

• High rate of procurement by mills: The mill is procuring raw jute at price higher than what they are selling them at after processing. Even the mill owner is not purchasing directly from the farmer as the farmers are far-off from the mill’s location.
• Low yield per acre: India produces a very low quantity of jute per unit of land, in fact among the producing country India’s production is one of the lowest. In Bangladesh, the average yield per hectare is 1.62 compared to India’s 1.3 tonnes per hectare.
• Declining Production: Ten years ago, the production was very high, but gradually reduced and since 2011 most farmers have stopped cultivating the crop, mainly shifting to horticulture crops.
• Price fall: The jute price kept falling from Rs 30,000-40,000 per tonne in the late 2000s, and it reduced to Rs 25,000 in 2010-11. This was just enough to recover the input cost.
• Poor Quality: Under retting, jute bundles are kept under water at a depth of about 30 cm. This process gives the fibre its shine, colour, and strength. It should ideally be done in slow-moving, clean water bodies like rivers. But Indian farmers do not have the access to such resources.
• Lack of Government intervention: When the prices fell, the Jute Corporation of India (JCI) Ltd, a Government of India enterprise for procurement of raw jute from the growers at the minimum support price, barely intervened.
• Problems of jute mills in India: Jute mills mainly faced the challenges like

• Machinery modernisation,
• Mismanagement,
• Labour shortage and
• Unrest and dependence on the government.

Amongst the functioning mills, only 8-10 are in good financial health and the rest can survive seasonal losses. The business of another 20 mills is just average. The rest of the mills are financially unsound.

Government intervention

• Golden Fibre Revolution and Technology Mission on Jute and Mesta are the government initiatives to mainly boost jute production in India. Due to its high cost, it is losing the market to synthetic fibres and packing materials and particularly nylon.
• Jute Packaging Materials Act, 1987:

• Through the Jute Packaging Materials (JPM) Act, the Government is protecting the interests of about 4 lakh workers and mainly 40 lakh farm families.
• The Act provides for the compulsory use of jute packaging material in the supply and the distribution of certain commodities in the interests of production of raw jute and jute packaging material, and of persons engaged in the production thereof, and for matters connected therewith.

• Jute Geo-Textiles (JGT):

• The Cabinet Committee on Economic Affairs (CCEA) has approved a Technical Textiles Mission which includes Jute Geo-Textiles.
• It is one of the most important diversified jute products. It can be applied in many fields like civil engineering, soil erosion control, road pavement construction and even the protection of river banks.

• Jute SMART:

• It is an e-government initiative which was launched in December 2016 to promote transparency in the jute sector.
• It provides an integrated platform for procurement of sacking by Government agencies.

• Jute-ICARE (Improved Cultivation and Advanced Retting Exercise) programme for increasing the productivity and even the quality of jute.
• Incentive Scheme for Acquisition of Plants and Machinery (ISAPM) for focusing on modernization and up-gradation of technology in existing/ new jute mills and JDP units.
• Jute Integrated Development (JID) Scheme to provide basic, advanced and design training and training cum production centres.
• Jute Raw Material Bank (JRMB) Scheme to supply jute raw materials to MSME units and artisans engaged in the production of jute diversified products at mill gate price.

Way forward

The focus must be on strengthening the jute mill for which the government have to purchase 70 per cent of the mills’ total production to give the sector a boost.

The domestic sector has also to be made competitive mainly in the price and the quality of the product.