The Cabinet Committee on Economic Affairs on Tuesday approved 5.6 per cent increase in the minimum support price (MSP) of raw jute, at ₹4,750 per quintal, for the 2022-23 season.
“The MSP of raw jute (TDN3 equivalent to TD5 grade) has been fixed at ₹4,750 per quintal for 2022-23 season with an increase of ₹250 over the previous year. This would ensure a return of 60.53 per cent over all India weighted average cost of production,” the government said in a statement. The new MSP is in line with the principle of fixing the benchmark prices at least 1.5 times over cost of production, which was decided in 2018-19.
The revised MSP for next season is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), the statement said.
“It is one of the important and progressive steps towards ensuring better remunerative returns to the jute growers and to incentivise quality jute fibre. The Jute Corporation of India (JCI) will continue as Centre’s nodal agency to undertake Price Support Operations in case market rates fall below MSP and the losses incurred, if any, will be fully reimbursed by the government,” the statement read.
The increase is realistic as the government uses 100 per cent jute bags in the procurement of paddy and wheat for the central pool stock, said an official. While the expense on gunny bags was ₹7,157 crore in 2020-21, it is expected to be around ₹10,500 crore in the current fiscal. The share of gunny bags in the economic cost of wheat was around 3 per cent in 2020-21 and is seen to be around 5 per cent in 2021-22, due to both increase in jute MSP and higher volume of procurement.