The Centre will not stop procurement of jute bags for mandatory packaging of wheat in jute bags, in May and June. Since the beginning of April, the Centre has been paying higher subsidy than last year for buying jute bags, at ₹86,917 a tonne.

However, the procurement level has been brought down to 70 per cent instead of 100 per cent. The balance 30 per cent of wheat packing by the Food Corporation of India and various State agencies will be done in plastic bags.

According to sources, the review meeting of the Committee of Secretaries of five Union Ministries, including Ministry of Finance, on April 22, did not further dilute the use of jute bags.

“By default, this meant that the price and the level of jute bag procurement for the 2016-17 rabi wheat crop will continue for May and June as decided earlier,” an industry insider told BusinessLine .

Under the provisions of the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987, the Standing Advisory Committee would take a stock of the situation and decide on the level of use of jute or plastic bags for wheat in June.

If the committee opts for any change in usage, it could be effective from July onwards.

Manipulation

The Centre, which is gradually reducing mandatory usage of jute bags for food grains and sugar through the provisions of the Act, is in a dilemma this year over the reported manipulation of supply of jute bag, considered as an essential commodity, and its price. It is alleged that the legislation, which was formed to protect the environment-friendly commodity, is being misused currently by a section of mill owners and traders.

The Union Ministry of Consumer Affairs, Food and Public Distribution had been urging to stop jute bag procurement immediately because of the marked-up cost as well as supply issues.

The Ministry of Textiles, however, has resisted the dilution for now. It argued that the proposed dilution would affect the entire jute sector, including the farmers and mill workers, creating a vicious cycle for the next season.

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