Tuesday, October 28, 2014

The Jute bag controversy- A Lobbying "contest"!

The eternal fight between jute lobby and plastic lobby for cornering a greater share of orders for packing bags for sugar and food grains does not seem to be ebbing as reflected by the attempts to dilute the much touted Jute Packaging Material Act of 1987 (JPM ACT) promulgated by Government of India to protect the interests of the jute farmers and jute mills predominantly located in North Eastern India. It was realized early by the government that jute industry is vital for saving employment and sustenance of jute farmers for which policy protection is necessary. There appears to be about 4 lakh workers engage by the jute industry who are not adept in doing any other work and therefore working of these mills is imperative for their livelihood. Besides about 40 lakh families are involved in farming activities to raise jute fiber whose very existence depends on the working of the jute mills. In the light of these compulsions government's move in promulgating the above Act mandating the use of jute bags for packing food grains and sugar has been timely and reassuring.

Advent of cheaper plastic sacks seems to have tempted the food grain and sugar sector to switch over to them though under the Law there is a limit beyond which plastics cannot be used. Offense under the JPM ACT is serious punishable crimes capable of attracting financial penalty and imprisonment. Still this Act is violated frequently while the government is a helpless bystander! The reasons are many for such a peculiar situation vis-a-vis jute bag use. According to JPM Act at least 40% of sugar produced must be packed in jute bags while 100% of grains stored and distributed must be in jute bags. From time to time government dilutes the stringent provision of the Act mainly because of inadequate availability of jute bags when required, based on the recommendations of ministries concerned. In 2012-13 the jute bag demand was about 14 lakh bales while the jute industry could supply only 13 lakh bales calling for increased use of plastic sacks. Similarly in 2013-2014 Government projected a need of 20 lakh bales but jute industry could only "commit" 16 lakh bales. Ultimately how much they can really supply is some thing one has to wait and see.

As a packing material plastic sacks recommend themselves because of their greater functionality, especially with regard to moisture ingression. For a commodity like sugar protection from moisture is absolutely necessary to prevent moisture absorption by this hygroscopic product. Some blame must be borne by the jute industry for its stagnant technological base and lack of innovative spirit. If adequate research and development activities were practiced it could have thrown up modified jute bags with superior functional properties. Still jute use must be encouraged in India because empty bags generate so much down stream business activities providing gainful employment to millions of people. Besides jute is a sustainable commodity unlike plastics which are made from fossil fuels with high polluting capacity.

In a move that smells of a victory for the plastic lobby, recent advocacy by the textile ministry for allowing plastics to be allowed for packing 80% of sugar production in the country, raises many uncomfortable questions. There is nothing wrong if plastic sacks are allowed to be used if there is a genuine shortage of jute bags. But whether there is really a shortage is not clear though there are reports that domestic jute industry is importing jute bags from Bangladesh illegally. Indian situation is some what odd because the government is being asked to micro manage two industries and it can never satisfy both of them. Probably since the government buys more than 40% of the jute bags produced in the country for packing procured grains in different states, it may be inevitable that such a role is played to act equitably for all the stake holders.

If there is a choice between plastics and jute, government is justified in going for the latter considering social, environmental, economic and other advantages inherent in the case of jute. By providing a minimum support price (MSP) to jute farmers government is doing a yeoman service and in the absence of such a mechanism jute would have vanished from India long ago. It is another matter that to day's market price for jute is significantly higher than the MSP but these are good times for jute industry and MSP's USP will be realized only during distress time when market value plunges due to extraneous problems, both domestic and international. The unique strength of India as a top jute producing country must not be forfeited though Bangladesh is almost at the heels of India in matching jute production. As against India's production of 2 million tons (MT) Bangladesh raises 1.5 MT and China 4,400,00 MT. 

A million dollar question that begs for an answer is whether the domestic demand for jute bags will remain same if and when the country goes in for modern storage technology like silos which can considerably reduce jute bag use. Similarly use of paper bags with ultra strength properties may also pose a challenge while new technologies in the plastic front can throw up much superior and cheaper alternatives to jute. Here is where the jute industry must try to diversify jute uses and exploit the "natural" tag attached to their products. Besides its "Green" credentials are high making it the choice for millions of people concerned about global warming and environmental destruction through unsustainable technologies and resources. probably it could take a leaf out of the strong coir industry in Kerala which has diversified the use of coir in a wide variety of modern day products.     


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