Jute Corporation refuses high-quality jute to few mills

Much to the discomfort of a select lobby of jute mills and braving 'pressure' from the office under union ministry of textiles, the Jute Corporation of India Limited (JCI) has refused to deliver higher quality jute to a number of mills saying the adherence of order would threaten the very existence of the corporation.

"The JCI is being pressurised to deliver raw jute to a few mills as per Jute Manufacturers Development Council (JMDC) norms even though it was delivering raw jute as per its own sale contract to all the mills," official sources said.

Giving details of extent of alleged pressure, the sources said one mill of the state had approached the union textiles ministry complaining that it was not getting jute as per JMDC norm and pleaded for direction from the ministry to JCI to this effect.

Pursuant to this, a director of textiles ministry issued a note to Jute Commissioner directing it to ensure lifting of the entire backlog of JCI-linked raw jute as per JMDC norm within seven days. On receipt of the note, the deputy JC asked JCI chairman and managing director to act as per the direction of the ministry, the sources said.

Mills are required to purchase raw jute from JCI against government orders. The JMDC norms stipulate that mills should be supplied with 22.32 per cent of TD3/TD4 grade, 38.49 per cent of TD5, 20.03 per cent of TD6 and 19.16 per cent of TD7/TD8 grades against JCI allocation of five per cent, 30 per cent, 43 per cent and 22 per cent for respective grades.

Sources said if JCI started delivering jute as per JMDC norms as demanded by at least 10 mills in the state, there would be no taker for lower grade jute which it purchases under minimum support price mechanism and the Corporation would have to suffer huge losses.

They further said that while JCI was delivering a mix of high and low grade raw jute to mills as per sale contract, ten mills owned by a strong lobby, which is now managing the affairs of Indian Jute Mills Association (IJMA), suddenly started demanding jute as per JMDC norms.

Meanwhile, a writ petition was filed by the mills in this connection in Calcutta High Court pursuant to which they obtained an order in their favour which was subsequently challenged by JCI in a division bench.

Sources said the entire episode has severely affected the MSP operation of JCI and a large number of farmers in West Bengal had suffered.

"Such was the impact that JCI had purchased only 7,600 quintal of raw jute under MSP in August this year compared to 34,000 quintals in August, 2003 and 55,000 quintal in 2002," they claimed.