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Statement made by Minister for Commerce, Industry and Textiles Shri Anand Sharma in Lok Sabha on situation arising out of dilution of Jute Packaging Materials (Compulsory Use) Act, 1987 and steps taken by the Government in this regard

New Delhi: December 14,2012

The jute sector occupies an important place in the Indian economy and especially so for the States of Eastern India. This sector provides direct employment to nearly 3.7 lakh workers and supports livelihood of nearly 40 lakh farm families. I share the concern of Members of this august House that the livelihood concerns of the farmers and workers associated in this sector must be protected.

The Jute Packaging Material (Compulsory use in Packing Commodities) Act, 1987 (JPM Act) provides the legislative framework under which Government provides for compulsory use of jute packaging material in supply and distribution of certain commodities in the interest of production of raw jute and jute packaging material and the persons engaged in the production thereof. The decision on norms for mandatory packaging of foodgrains and sugar in jute packaging material is taken after obtaining recommendations of the Standing Advisory Committee constituted under the Act.

For the Jute Year 2012-13 ( 1st July 2012 to 30th June 2013), government approved mandatory packaging in jute bags a minimum of 40% of the production of sugar and 90% of the production of foodgrains, after providing an upfront exemption of 3.5 lakh bales of HDPE/PP bags for foodgrains for excess of Khariff production.

The Ministry of Textiles accordingly notified these minimum packaging thresholds which do not exclude the possibility of greater utilization of jute bags in case of sufficient availability.

The Government in taking this decision, has in no way, diluted the JPM Act and has fully kept in mind the interest of all stakeholders engaged in the jute sector.

Experience over the years has shown that demand for jute bags has outstripped the supply and during the Khariff Marketing Season 2012-13, against the requirement of 14.07 lakh bales of jute bags, only 12.97 lakh bales were supplied by jute mills, leaving a shortfall of 1.10 lakh bales. For the coming Rabi Season 2013-14, we have projected a requirement of 20 lakh bales during November 2012 to May 2013 against which the jute industry has indicated a supply line of 16 lakh bales, leaving a shortfall of 4 lakh bales. Even this seems to be an optimistic projection.

The production of raw jute this year is estimated to be at a level of 93 lakh bales which shall be fully consumed by jute mills which uses this material for other jute products as well.

The Minimum Support Price (MSP) for raw jute for the Jute Year 2012-13 has been fixed at Rs. 2200 per quintal as against Rs. 1675 per quintal in the previous year. At present, the market prices of raw-jute are above the MSP levels, though the Jute Corporation of India is fully prepared and has already commenced MSP operations in lower grades of jute.

Contrary to an impression of unemployment in jute mills, there are reported labour shortage.

During the last Rabi Season 2012-13, that jute mills were unable to supply jute bags in time and we had to issue relaxation orders of 1.6 lakh bales of HDPE/PP bags to foodgrains procuring agencies of Madhya Pradesh, Haryana, Punjab and Uttar Pradesh and Food Corporation of India. This year, we have requested for an advance mandatory indent plan for the whole year from the States and advance monthly commitment of jute production from jute mills to avoid bunching of orders and supply. I request the cooperation of all State Governments including the State Government of West Bengal to ensure timely indenting, production and supply of jute bags to avoid disruption in the larger interest of this industry.

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