Jute Act may be diluted further

The Standing Advisory Committee (SAC) on jute has finally recommended a dilution of the Jute Packaging Materials Act (JPMA) of 1987. The recommendations, which seek to cut jute packaging in foodgrains by 25-75 per cent and 30-70 per cent in case of sugar between July 1, 2007, and June 30, 2008, have sounded a death knell for the ailing jute industry.

It is now for the government to decide on the recommendations, which would shortly be deliberated at the highest levels of the textile ministry. Three years ago, similar moves were taken by different government agencies but failed to fructify with the Union Cabinet shooting it down, amid vehement countrywide protests.

That the SAC was moving on those lines was evident recently when it challenged the efficacy of the much-flaunted JPMA at the latest meeting of the SAC.

The meeting observed that the JPMA Act has not served its purpose despite being overprotected by the government against the continuing onslaught of plastics. Moreover, the production pattern of the jute industry also has not changed with growers continuing to be deprived of their remunerative prices.

The fight between plastics and jute recently reached a flashpoint with the petroleum and petrochemicals sector recommending dilution of JPMA, the virtual mainstay of the jute industry, thereby inviting protests countrywide both from politicians and jute barons. The matter has been currently kept in abeyance.

SAC's observations, however, were rejected by the representatives of the Indian Jute Mills Association (IJMA) who said it was incorrect to say there has been no change in the pattern of production of jute goods.

However, they admitted that the main outlet for jute goods is in the field of packaging and the avenue was time and again getting choked because of certain extraneous factors such as the 63-day strike resulting in the non-supply of materials in time. IJMA said the production of jute yarns, currently estimated at 2 lakh tonnes, is almost wholly exported. The industry is also trying to diversify into other value-added items.

Holding its brief in favour of plastics, the meeting observed that the price difference between a jute bag and synthetic bag is quite large.

The burden is currently been borne by the consumers and the government is subsidising the procurement through subsidy of over Rs 1500 crore.

The jute packaging industry generates a volume of business of Rs 2700 crore and about 9 lakh tonnes in volume terms. IJMA representatives said a study by IIT Kharagpur in February 2000 has clearly brought to the fore that the number of reuses and the effective life of a jute sack more than compensates its weight and first cost-disadvantages compared to a polysack.

The matter was also raised before the Supreme Court. But, the apex court had declined to examine the relative economic viability of the respective industries. Concern was expressed at the meeting over the supply of poor quality B Twill bags and irregular delivery.

IJMA pointed out though complaints regarding poor quality B Twill bags was less than 1 per cent in the overall scenario, inspection procedure, however, should be tightened and the mills supplying defective bags should be blacklisted.

According to IJMA, the delay in deliveries were mainly on account of placement of orders on mills on an unplanned basis and CONCOR's failure to lift the goods in time on FCI's account.