The Centre has ensured a special protection to the jute industry by bringing jute products under the environment-friendly category. This has ensured that the Jute Packaging Materials (Compulsory use in Packaging Commodities) Act, 1987, would not be diluted.

So long the jute, according to government norms, was only considered as a labour-intensive industry and government policies were framed accordingly.

The finance ministry in November 2014 recommended dilution and full phase out of the jute packaging Act by 2016-17. The government procurements were also gradually coming down to this effect. But the Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, decided that the minimum percentage to be reserved for packaging in jute should be retained to 90% in case of food grains and 20% in case of sugar.

The decision follows a report by MP Chandan Mitra, in which he said that the government should take an in-principle decision of not diluting the jute packaging Act. He recommended that jute packages get its due share of food packaging.

An official in the office of the jute commissioner said the government has already decided on its procurement target. Based on the Department of Food and Public Distribution’s projection, there would be requirement of 90 lakh bales of raw jute in 2016-17 to meet the jute packaging demands.

Sanjay Kajaria of the Indian Jute Manufacturers’ Association (IJMA) and also owner of Gondalpara, Hastings and India Jute mills, said although the government has ordered consumer packs of above 10 kg and up to 25 kg to be done in jute bags for distribution of foodgrains under the Food Security Act, the packaging has been kept subject to cost competitiveness compared to HDPE/PP or plastic bags.

The cost competitiveness factors in the subsidy the government provides for foodgrains. But for jute bag makers the problem lies in the cost of production, since there is scarcity of raw material effecting in higher price of jute.