Presented To:
Standing Advisory Committee
(Twentieth Meeting) held on
20th June, 2012
JPMA, 1987

Initially covered foodgrains, cement, fertilizer and sugar.

Cement excluded in the year 1998.

Fertilizer was excluded in 2001.

Foodgrains procured and subsidised by Government.

Sugar remains the only private/non-government sector
industry still under JPMA.
Last SAC Meeting: 13th June 2011
3

Jute Commisioner had suggested for either

full removal of sugar and 100% foodgrains or

80% compulsory packing of both

Opinion of the Jute Commissioner was ignored by the SAC.

SAC recommended 90% of foodgrains and sugar to be packed
in jute bags.

For reasons unknown, CCEA mandated 100% of foodgrains
and sugar to be packed in jute bags.
Availability Issue
4
Particulars
2005-06
2011-12
% change
Production of
Foodgrains
208 mn tons
250 mn tons
+20%
Production of
Sugar
19.3 mn tons
26 mn tons
+34%
Production of
Raw Jute
11 mn bales
11 mn bales
0%
Production of foodgrains and sugar has gone up substantially,
whereas production of raw jute has remained stable.
Foodgrains production vis-à-vis Jute production during the
last six years
5
300
280
260
240
220
200
180
160
140
120
100
80
60
40
20
0
2005-06
Production of Jute(in mn bales)
2011-12
Production of foodgrains (in mn tons)
Sugar production vis-à-vis jute production in the last 6
years
6
30
25
20
15
10
5
0
2005-06
Production of jute (in mn. Bales)
2011-12
Production of sugar (in mn. Tons)
Availability of Jute
7

Raw jute is regularly imported from Bangladesh
Year
Import of Raw jute (lakh bales)
2011-12
133
2010-11
118
2009-10
101
2008-09
106

Import of raw jute is consistently increasing

Clearly establishes that domestic raw jute is inadequate to
meet full domestic demand arising due to compulsory packing
order.
100% compulsory packing in jute bags resulted in
8

Lack of competition for packing material for foodgrains & sugar

A total dominant position for jute industry.

Very high price of jute bags in comparison to other packing
material

Ministry of Textiles in their Annual Report has accepted that
this has led to

Lack of modernization in jute industry.

Lack of development of new opportunity or new product.
Increased Cost to Consumers/BPL Families
9

Comparative cost of 50 kg bags: HDPE bag : Rs. 15
Jute bag:
Rs. 35
Translates into additional cost of 40 paise/kilo of sugar


Loss of Rs.1000 crore to the sugar industry per year.

Adversely impacts capacity of mills to pay ‘good’ price to cane farmers.

Industry generally pays 65-70% of revenue to farmers

Translates to Rs.650 to 700 crore loss to farmers every year
Affects cost of levy sugar procured for PDS for BPL families
Price Protection to Foodgrains
10

FCI and State agencies procure 60% of the jute bags produced
in the country.

An administered price on Tariff Commission formula is
announced by Government every month.

Such protection is not available to the sugar industry.
Procurement Price of Jute Bags for Sugar and Foodgrains
11
7000
6000
5000
Sugar
4000
Foodgrains
3000
2000
1000
0
2008-09
2009-10
2010-11
Quality of jute bags: BIS Specifications
12

BIS specification for 50 kg jute bags itself defective.

Bags with mildew and fungal infection upto certain
percentage are still permitted.

Moisture regain value over 22% is also allowed, which causes
bacterial contamination affecting the quality of sugar.
Quality Problems ……
13

Presence of jute batching oil, used during the softening
process of jute, also affects the quality of sugar.

Gaps of 1.5 cm results in leakage of sugar, causing loss to the
mills as well as to consumers, including FCI & States.

Bags not as per specifications and weight


Mills have to put extra sugar to match gross weight requirement
Sample bags submitted through Food Ministry to Jute
Commissioner accepted to be defective and below weight

Refusal by UP State Agency to lift levy sugar
Bulk Consumers
14

About 65% of sugar in India is purchased by bulk consumers
viz- Coke, Pepsico, biscuit manufacturers, pharmaceutical
companies etc. who do not accept sugar packed in jute bags.

The mills have to use alkathene liners to avoid jute fibers and
batching oil, which further increases the cost.

Nowhere in the world is there a compulsory packing order of
sugar in jute bags

Indian Government, recognising non-acceptability of jute bags
internationally, allows sugar exports to be packed in HDPE/PP bags
Shortage of Jute Bags
15

Due to implementation of ILO convention, packing is now to
be done in 50 kg bags.


This has increased the quantity of raw jute required for jute bags.
Lack of inadequate production of raw jute and capacity with
jute mills, there is shortage of jute bags in the country.

This has been accepted by the Government in Parliament also.

Also accepted that shortage of jute bags caused wastage and rotting of
foodgrains
Shortage …….
16

The Government has announced that they are going to import
jute bags.

As per the JPMA notifications, foodgrains and sugar have
to be packed in jute bags manufactured in India from raw
jute produced in India only.

Therefore, imported jute bags cannot be utilised for packing of
foodgrains and sugar.
Shortage …..
17

Phased exemptions granted by Government to foodgrains

Exemptions have been granted for use of HDPE bags for packing of
foodgrains, in the States of M.P., Haryana and U.P.

Foodgrains require air to avoid deterioration in quality which
can be ensured by jute bags,

But air and moisture are harmful for sugar and is to be
absolutely avoided.

Hence, exemptions from jute packaging should be allowed first
for sugar to the xtent of 100% and then only for foodgrains
Request/Demand of Sugar Industry
18

Sugar should be completely removed from JPMA.

If mandatory packing in jute bags has to be continued, it
should be continued with foodgrains because

foodgrains are non-hygroscopic.

the Government agencies procure jute bags at an administered
price.

due to inadequate production of raw jute, increased production of
foodgrains and sugar, Indian jute mills are not able to meet the
demands of both the foodgrains and sugar sector.
19
Thank You