The Cabinet Committee on Economic Affairs (CCEA) has approved a hike in the minimum support price (MSP) of raw jute by Rs 285 to Rs 5,335 per quintal for the 2024-25 season. The decision is expected to benefit farmers in eastern states, especially West Bengal, where jute cultivation is predominant. The new MSP is 65 per cent more than the estimated cost of production and 1.5 times the all-India weighted average cost of production, as per the government’s policy.
Why is MSP important for raw jute farmers?
Jute is a natural fibre that is used for making sacks, bags, carpets, curtains, upholstery and other products. It is also known as the golden fibre because of its colour and value. India is the largest producer of jute in the world, accounting for about 60 per cent of the global output. Jute cultivation provides livelihood to about 40 lakh farmers and supports about 4 lakh workers in jute mills and allied industries.
However, jute farmers face several challenges such as low productivity, high input costs, erratic rainfall, pest attacks, lack of irrigation facilities and market fluctuations. The MSP acts as a safety net for them by ensuring a remunerative price for their produce and encouraging them to grow more jute. The MSP also helps in stabilising the supply of raw jute to the domestic industry, which depends on it for meeting its raw material requirements.
How will the MSP hike impact the jute industry?
The jute industry is one of the oldest and most important industries in India, contributing to the country’s exports, employment and environment. The industry comprises about 70 jute mills that produce various types of jute products such as hessian, sacking, yarn and diversified jute goods. The industry also provides indirect employment to about 2 lakh people in ancillary units.
The MSP hike is likely to have a positive impact on the jute industry by ensuring adequate availability of raw jute at reasonable prices. The industry has been facing a shortage of raw jute in recent years due to lower production and higher demand from other sectors such as paper, textiles and handicrafts. The MSP hike may also boost the demand for jute products in the domestic market as well as in the international market, where India faces competition from Bangladesh, Nepal and China.
The government has also taken several steps to support the jute industry such as mandatory packaging of foodgrains and sugar in jute bags under the Jute Packaging Materials Act (JPMA), providing financial assistance for modernisation and upgradation of jute mills, promoting research and development in jute sector and launching a new industrial development scheme for north-eastern states called UNNATI-2024 with a budget of Rs 10,037 crore.
Conclusion
The government’s decision to raise the MSP for raw jute by Rs 285 for FY25 is a welcome move that will benefit both the farmers and the industry. It will ensure a fair price for the farmers, enhance their income and livelihood security, increase their production and productivity, reduce their dependence on middlemen and improve their bargaining power. It will also ensure a steady supply of raw jute to the industry, improve its competitiveness and profitability, create more employment opportunities and promote sustainable development.
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