Mandatory use of jute in packaging to continue: CCEA

29 Jan '15

3 min read

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved continuation of mandatory packaging of foodgrains and sugar in jute material to the minimum extent of 90 percent and 20 percent respectively for the Jute Year 2014-15 with certain exemptions.

CCEA said the decision was taken to preserve and promote the jute sector, which is a source of livelihood for 40 lakh farm families.

For the Jute Year 2014-15, jute packaging is reserved for 90 per cent of production of foodgrains, with the stipulation that in the first instance, the indents for the whole requirement would be placed for the jute bags and in case the jute mills are not able to provide the jute bags as per the requisition, then a dilution up to 10 percent would be permissible by the department of food in consultation with the ministry of textiles.

For sugar, minimum percentage reserved for packaging in jute is 20 per cent of the production. However, in the Order under JPM Act, some exemptions may be allowed. For example, 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, packaging for export of the commodities, small consumer packs of 10 kg and below for foodgrains and 25 kg and below for sugar, and bulk packaging of more than 100 kg has been kept out of the purview of the reservation.

In case of any 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 the provisions further.

The CCEA also approved providing financial support to the Jute Corporation of India (JCI). It decided to provide subsidy to the JCI on a continuous basis to off-set 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 raw jute, and fixed overhead costs incurred by JCI in maintaining its infrastructure for MSP operation.

However, the reimbursement of fixed overhead cost would be maintained at a reducing amount. The annual subsidy/grant to JCI for maintaining its infrastructure for MSP operations will be Rs 55 crore in 2014-15, Rs 52.11 crore in 2015-16, Rs 49.38 crore in 2016-17 and Rs 46.78 crore in 2017-18. (RKS)

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