)
The jute industry's long standing demand to revise prices of jute bags has got a setback with the Tariff Commission either rejecting most of the demands or calling for a fresh review.
The commission was set up to determine the fair price of 50 kg B twill jute bags used by government procurement agencies for packing food grains and sugar.
The industry had sought a 'fair price' for jute bags based on the revised calculation of salary and wages of the workers, interest rates and price adjustment formula, use of jute batching oil, raw jute and productivity norms. According to the Commission's report, the 'fair price' of jute falls between Rs 54819 and Rs 55481 per tonne.
As per industry records, the current government price of jute bags is Rs 56565 a tonne in January and is expected to touch Rs 58355 a tonne in February. Since the prices are fairly higher than the 'fair price' demanded and worked out by the Commission, most of industry's demands have been rejected.
Jute bag prices were fixed in 2001 by an independent Tariff Commission. In 1997, the government constituted an independent Tariff Commission under Department of Industrial Policy and Promotion (DIPP) to study tariff formulas for different commodities.
In 2003 and 2007, two fresh studies were conducted to revise the prices. The Union textiles ministry rejected both studies. The Commission placed its last report on jute in June 2009. In 2010, the ministry requested the Commission to conduct a fresh study to fix a fair price for B twill jute bags.
The Commission submitted its fourth report in September 2013. The Jute Commissioner's office pointed out lapses in the report and once again requested the Commission to re-work it.
Based on the request, a supplementary report has been submitted by the Commission this month. The supplementary report elaborately dealt on issues raised by the Jute Commissioner's office.
The report used a sample of 22 jute mills dividing those under two sections; top performing quartile mills and top half performing quartile mills. The assessed efficiency norms for all sections in the jute mills were taken into consideration before fixing the formula.
The Commission took into consideration the actual cost of production of the industry in 2007-08 and other normative parameters and updated prices till March 2013.
"We are opposed to the observation. The operations of poorly performing functioning mills were not taken into consideration before fixing the formula. The National Jute Board's productivity norms were partially used. Half of our demands were not considered while calculating the formula," said a jute mill owner.
There are 67 operating jute mills of which 54 are in West Bengal. Twenty eight mills are under Board for Industrial and Financial Reconstruction (BIFR).
