Mandatory Jute Bag Packaging

 

Mandatory Jute Bag Packaging

• Recently, the Cabinet Committee on Economic Affairs, chaired by the Prime Minister, has approved that 100% of the foodgrains and 20% of the sugar shall be mandatorily packed in jute bags.
• The decision will give an impetus to the diversification of the jute industry.

Extended Norms:

• The decision mandates that initially 10% of the orders of jute bags for packing food grains would be placed through a reverse auction on the GeM portal, which will gradually help in a regime of price discovery.
• In a reverse auction, the sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid each other.
• Price discovery is the process of determining the price of an asset in the marketplace through the interactions of buyers and sellers.

Statutory Provision:

• The government has expanded the scope of mandatory packaging norms under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987, also known as the JPM Act.
• Under it, the Government is required to consider and provide for the compulsory use of jute packaging material in the supply and distribution of certain commodities.

Government Dependent Sector:

• The jute industry is predominantly dependent on the Government sector which purchases jute bags of value of more than Rs. 7,500 crore every year for packing foodgrains.
• This is done to sustain the core demand for the jute sector and to support the livelihood of the workers and farmers dependent on the sector.
• Nearly 3.7 lakh workers and several lakh farm families are dependent for their livelihood on the jute sectors so the government has been making concerted efforts for the development of the jute sector by:
• Increasing the quality and productivity of raw jute.
• Diversifying the jute sector.
• Boosting and sustaining demand for jute products.

Benefits:

• The move will benefit farmers and workers located in the Eastern and North-Eastern regions of the country particularly in the states of West Bengal, Bihar, Odisha, Assam, Andhra Pradesh, Meghalaya, and Tripura.
• The reservation norms in the present proposal would further the interest of domestic production of raw jute and jute packaging material in India, thereby, making India self-reliant in consonance with Aatmanirbhar Bharat.

Source: PIB