CCEA Expands Jute Packaging Norms

Trade & Policy

CCEA Expands Jute Packaging Norms

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi has given its approval to expand the scope of mandatory packaging norms under the Jute Packaging Material (JPM) Act, 1987 as follows:

The CCEA approved that 100% of the foodgrains and 20% of sugar shall be mandatorily packed in diversified jute bags. The decision to pack sugar in diversified jute bags will give an impetus to the diversification of the jute industry.
Initially 10% of the indents of jute bags for packing foodgrains would be placed through reverse auction on the Gem portal. This will gradually usher in a regime of price discovery.

Impact:

The decision will give a fillip to the development of jute sector; increasing the quality and productivity of raw jute, diversification of jute sector and also boosting and sustaining demand for jute products.
This is important considering the fact that nearly 3.7 lakh workers and several lakh farm families are dependent for their livelihood on the jute sectors.
The jute industry is predominantly dependent on the government sector which purchases jute bags worth more than Rs 6,500 crore every year for packing foodgrains. This is done in order to sustain the core demand for the jute sector and to support the livelihood of the workers and farmers dependent on the sector.
The decision will benefit farmers and workers located in the eastern and north eastern regions of the country particularly in the states of West Bengal, Bihar, Odisha, Assam, Andhra Pradesh, Meghalaya and Tripura.

Measures by the government to support the jute sector

In order to improve the productivity and quality of raw jute through a carefully designed intervention, called the Jute ICARE, the government has been supporting close to one lakh jute farmers by disseminating improved agronomic practices such as line sowing using seed drills, weed management by using wheel-hoeing and nail-weeders, distribution of quality certified seeds and also providing microbial assisted retting. These interventions have resulted in enhancing the quality and productivity of raw jute and increasing income of jute farmers by Rs 10,000 per hectare.
In this connection, to support jute farmers, Jute Corporation of India (JCI) has been given a grant of Rs 100 crore for two years starting from 2018-19 to enable JCI to conduct MSP operations and ensure price stabilisation in the jute sector.
With a view to support diversification of jute sector, the National Jute Board has collaborated with National Institute of Design and a Jute Design Cell has been opened at Gandhinagar. Further, promotion of jute geotextiles and agro textiles has been taken up with the state governments particularly those in the north eastern region and also with departments such as Ministry of Road Transport and Ministry of Water Resources.
With a view to boost demand in the jute sector, the government has imposed definitive anti-dumping duty on import of jute goods from Bangladesh and Nepal with effect from 5th January, 2017. As a result of these measures, 13 twine mills in Andhra Pradesh resumed operations, benefitting 20,000 workers. Further, imposition of definitive anti-dumping duty has provided scope for an additional demand of 2 lakh MT of jute goods in the domestic market for the Indian jute industry.
With a view to promoting transparency in jute sector, Jute SMART, an e-govt initiative was launched in December, 2016, providing an integrated platform for procurement of B-twill sacking by government agencies. Further, the JCI is transferring 100% funds to jute farmers online for jute procurement under MSP and commercial operations.