Farmers face declining demand and price fluctuations in the jute sector.
Farmers involved in the jute industry in India are presently grappling with a decline in demand and challenges related to pricing.
What’s Happening?
The jute industry in India produces various jute products such as Hessian or Burlap, food-grade jute fabric, yarn, carpets, decorative fabrics, floor coverings, shopping bags and more. However, farmers in the country are currently confronting the issue of decreasing demand for their produce and are compelled to sell their crops at considerably lower prices.
As mentioned in CNBC TV18, according to Dr Fauzia Khan, a former minister of Maharashtra and a member of the Rajya Sabha, nearly forty lakh farming families, three lakh mill workers, and one lakh traders are presently part of this industry, facing the looming threat of being labelled a ‘sunset industry.’ Yet, the question arises: what is causing these challenges?
Current Challenges in India’s Jute Industry
Despite the presence of the Jute Packaging Materials Act (JPMA) of 1987, farmers and traders are grappling with a decrease in demand and prices. The primary reason for this decline is the non-compliance of the JPMA by the sugar industry in China. The legislation required at least 20% of sugar to be packed in environmentally friendly jute bags, but the sugar industry opted for cost-effective plastic bags instead. The neglect of these regulations has led to a significant reduction in the demand and prices of jute. Consequently, farmers are forced to sell their produce at significantly lower rates.
Jute Export from India
India primarily exports jute and jute products to countries such as the United States, Britain, Australia, Belgium, Egypt, Germany, Italy, Japan, Saudi Arabia, and Turkey. According to Statista, India exported jute worth more than eight billion rupees to the United States in the financial year 2022. However, a subsequent decrease in exports has been noted, potentially resulting in a 5-6% decline in revenue for India’s jute industry.
What’s Next?
Jute farmers are not only contending with low demand but also struggling with prices lower than the Minimum Support Price (MSP). If this trend continues, many farmers might consider exploring alternative crops. However, the jute industry holds a unique position concerning environmental sustainability. The jute industry causes less environmental damage compared to synthetic materials. Global shifts towards sustainable practices and rejecting single-use plastics present an opportunity for the jute industry to thrive.
While the government has initiated several schemes for developing the jute industry, stronger efforts are needed to overcome the current challenges.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.
*Disclaimer: https://tejimandi.com/disclaimer
