In a major blow to the jute industry, the Haryana government, one of the largest purchasers of jute bags, has sought packing of 40 per cent of wheat and other foodgrains during the rabi season in plastic bags by diluting the mandatory Jute Packaging Material Act (JPMA), 1987.
The Haryana government, in a letter to the Union textile ministry, has pointed out that the jute industry had been defaulting in supply and was unable to meet the rise in demand for bags for the past three-four years.
Madhya Pradesh, Chhattisgarh and Uttar Pradesh are the other states where jute bags are in short supply.
Haryana and Punjab account for almost 35 to 40 per cent of jute bag requirement, followed by Madhya Pradesh, UP and Bihar. The jute industry annually earns around Rs 8,000 crore from the sale of gunny bags.
On October 11, the Cabinet Committee on Economic Affairs (CCEA) dereserved the JPMA and gave permission for packing 10 per cent of wheat and 60 per cent of sugar in plastic bags. As a result, the jute industry fears a loss of Rs 1,500 crore.
The industry has approached all concerned departments and ministers to revert the decision in the interest of the families of three crore farmers and industrial workers.
In a recent letter to the director (jute), textile ministry, the director-general, food and civil supplies of Haryana raised six specific objections to the use of jute bags for packing wheat and foodgrains.
The objections are that plastic bags are cheaper; gunny bags are prone to contamination because of moisture absorption; plastic bags are light weight; the farmer is forced to pack excess grain with moisture; a huge number of quality-related complaints against jute bags; and that 90 per cent of jute mills located in West Bengal are mostly on strike.
Between November 2012 and May 2013, the government expects a supply of around 21 lakh bales of jute bags from the industry to seven state food-procuring agencies and the Food Corporation of India. Going by available capacity, it is likely that the industry would not be able to supply more than 17 lakh bales.