The crisis over jute mills is escalating in West Bengal as the TMC and the Centre are at the daggers drawn over the issue of capping raw jute prices at Rs 6,500 per quintal. While The TMC has demanded the Centre to raise the ceiling price of jute to Rs 7,200 per quintal, according to state government documents, the Mamata Banerjee-led regime in Bengal had themselves kept the upper cap of jute prices at Rs 6,000 per quintal.
The revelation assumes significance, especially in the light of the faux outrage over the upper cap price for jute in West Bengal. Sukhendu Sekhar Ray, the chief whip of the Trinamool Congress in the Rajya Sabha, had appealed to the Centre to solve the crisis which he claims to have a bearing on the livelihood of around three crore workers engaged in the sector.
Alleging that the jute industry is on the brink of an imminent collapse, Ray ascribed the crisis to the price cap that he claimed was having a negative impact on the industry. He wrote separate letters to Union Agriculture Minister Narendra Singh Tomar and Textile Minister Piyush Goyal, stating that the Centre’s decision of keeping the price cap on raw jute has led to shuttering of 15 jute mills, leaving over 60,000 workers jobless.
“From November 2021, the Jute Commissioner’s Office is engaged in an unhealthy battle with Bengal’s jute industry on the capping of raw jute price at ₹6,500 per quintal while the industry demand is ₹7,200 per quintal. Chief Minister Mamata Banerjee has publicly opposed the cap imposed by the Jute Commissioner on 30 September 2021, but it has not been removed,” Ray was quoted as saying in a report published by The Federal.
The TMC demand for the removal of the ceiling limit to the price of raw jute got a boost when BJP MP Arjun Singh wrote a strongly-worded letter to Piyush Goyal, asking the Centre to revoke the Rs 6,500 per quintal price cap on jute and contending that the move’s economic benefits were outweighed by its political losses.
TMC govt had set Rs 6,000 per quintal as the upper cap price for jute
The Centre, in its response to Singh’s letter, highlighted the chicanery of the TMC government. While the Mamata Banerjee government in West Bengal is demanding that the Centre remove the price ceiling on the jute prices, the TMC government in 2020 had suo moto recommended fixing the upper cap of raw jute price at Rs 6,000 per quintal, which is lower than the upper cap of Rs 6,500 per quintal fixed by Jute Commissioner office on September 30, 2021, for the year 2021-22.
As per the decision taken by the West Bengal government in December 2020, a copy of which was accessed by OpIndia, the government had decided to maintain the price of raw jute at Rs 6,000 per quintal, which is lower than the price recommended by the Centre. This technically means that the Centre’s price is superior compared to the West Bengal state government’s decision and farmers stand to gain more with Rs 6,500 per quintal as the upper cap of jute prices as compared to the Bengal government’s cap of Rs 6,000 per quintal.
“The CACP in its’ report for 2021-22 had estimated production cost of raw jute at Rs 2832/- per quintals and MSP was fixed at Rs 4500/ – per quintals with more than 50% profit margin (58.9% to be precise) for farmers. Jute Commissioner had fixed the upper cap at Rs 6500/- per quintal leaving no room for grievance by farmers,” the Centre said in its response to Singh’s letter.
No complaints from farmers, upper ceiling price arrived at with scientific method: Centre
Furthermore, the central government has further highlighted that there have been no complaints, either orally or in writing, by any farmer or farmer bodies about the raw jute price fixation. The Centre further added that at present no jute of current season is being held by farmers and that it lies with the middlemen/traders and even with mills in their own name or in name of third parties at various places.
“Relaxation in the upper price cap will only accrue illegitimate financial gains by these parties and no benefit will accrue to the farmers. As per informal sources, the raw jute production is expected to rise further during 2022-23 compared to 2021-22 due to receipt of remunerative price by the farmers – provided there is no large scale weather-based disruptions,” the Centre’s letter read.
Besides, the price of Rs 6,500 per quintal has a scientific basis, the Centre argued. The prices have not been arbitrarily fixed and have been arrived at in accordance with due scientific methodology.
“The minimum market price of the present Jute Season was Rs 5750/- per quintals at the beginning of the jute season and the maximum price was Rs 6800/- quintals for TDN3/TD5 Ex-West Bengal grade raw jute. On 30th September 2021 (the date of fixation of reasonable price) the price was Rs 6700/- per quintal. The average price of raw jute for the reference-grade was Rs. 6351/- for the month of September 2021. Therefore, the fixation of raw jute price at Rs 6500/- per quintals was not arbitrary and was in coherence with the market trend prevailing,” it said.
