Mandatory use of jute in foodgrain packaging to continue at 90%

The Cabinet Committee on Economic Affairs (CCEA) has clarified that the mandatory minimum jute required in packaging of foodgrains would at 90 per cent and for packaging sugar at 20 per cent will apply for the whole of the jute-year 2014-15 (1 July 2014 to 30 June 2015).

The CCEA chaired by Prime Minister Narendra Modi on Wednesday decided to maintain the mandatory packaging of foodgrains and sugar in jute material to the minimum extent of 90 per cent and 20 per cent, respectively, for the jute year 2014-15, although with certain exemptions.

The decision will help preserve the interests of the jute sector and allay concerns that the reservation for jute packaging would be reduced, the CCEA noted.

For foodgrains, the Jute Packaging Order stipulates in the first instance that the indents for the whole requirement would be placed for the jute bags and in case the jute mills would not be able to provide the jute bags as per the requisition, than a dilution up to 10 per cent would be permitted by the department of food in consultation with the ministry of textiles.

The Jute Control Order is intended to preserve and promote this vital sector which generates a lot of livelihoods for farmers and workers, CCEA said.

However, the following exemptions may be allowed in the order under JPM Act:

• Sugar packed for export but which could not be exported may be exempted from the operation of the order on the basis of an assessment by and request of the department of food and public distribution;
• Sugar fortified with vitamins or packed for exports and consumer packs of 25 kg and below for sugar and 10 kg and below for foodgrains as also bulk packaging of more than 100 kg; and
• In cases of shortage or disruption in supply of jute packaging material or in other contingency/exigency, the ministry of textiles may, in consultation with the user ministries concerned, relax these provisions further, up to a maximum of 30 per cent of the production of foodgrains over and above the prescribed limit.

The CCEA also approved provision of financial support to Jute Corporation of India (JCI) through a continuing subsidy in order to offset the losses on account of minimum support price (MSP) operations by JCI.

The quantum of subsidy will include the difference between the purchase and sale price of MSP for raw jute. JCI will also be reimbursed the fixed overhead costs incurred in maintaining its infrastructure for MSP operation, albeit at a reduced rate.