DRAFTED BY ANJALI SINGH
Context:
Several jute mills in West Bengal are on the verge of closure.
About jute
Jute is a natural fiber that grows in an area with temperatures around 25 degrees Celsius, and rainfall of about 150-200cm. It requires humidity of about 70-90%.
India is the largest producer of jute and Bangladesh is the largest exporter of jute. In India most of the jute is produced in West Bengal, Assam, Bihar, and Odisha.
What is causing the crisis?
The reasons for the crisis are:
● Raw material procurement has become costly and the MSP declared is not sufficient with rising prices.
● The cyclone Amphan in 2020 reduced the jute output causing a shortage of raw material.
● The demand for jute is reducing as it is replaced by plastic packing. However, in India, the Jute packaging act(compulsory use in packaging commodities) mandates 100% packing of food grains in jute bags.
● Other competitors like Bangladesh give direct cash subsidies to mills making them more profitable compared to India.
