IF cement were packed in jute bags, the money lost could feed 41,94,500 people for a full year." So reads an advertisement released in most national dailies last week by the Cement Manufacturers Association.
Its a classic case of control breeding chaos. In 1987, when the Government passed the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, it couldnt have imagined that this law would go on to create such a furore a decade later. And if it could, it preferred to ignore the long-term implications for short-term populist gains. The Jute Packaging Act (JPA) stipulated that a certain percentage of four commodities fertilisers, sugar, foodgrains and cement were to be compulsorily packed in jute bags. While the entire production of foodgrains and sugar is to be packed in jute bags, half the total cement and fertilisers output in the country is supposed to be packed in jute.
The cement and fertiliser industries went to the Supreme Court, which in turn upheld the validity of the Act in April 1996. The Court however referred the matter to a Government-appointed Standing Advisory Committee which was to decide as to which commodities and to what extent, jute bags should be compulsorily used, keeping in mind overall national interest. While the Standing Committee is yet to give its final verdict, all hell is breaking loose with arguments, counter arguments and threats being exchanged between the cement and jute manufacturers.
The JPA was a temporary measure used to boost the demand for jute in order to help jute farmers and the industry. In 1987, the then textile minister Ram Niwas Mirdha noted: "The jute industry occupies a significant position in the national economy, providing direct livelihood to nearly four million rural agricultural families and 2.5 lakh industrial workers. It is necessary to afford protection to the industry."
But the current Industry Minister Murasoli Maran recommended that the cement industry be exempted from the JPA. Reason: unlike commodities such as foodgrains and sugar, jute is not the ideal packing material for cement because of its fine powdery form which results in losses due to seepage during handling, transit and storage. This results in an annual loss of Rs 800 crore, he observes. Besides, jute bags are costlier than plastic woven sacks by Rs 7-8 per bag. The net additional burden on the consumer: a staggering Rs 500 crore per annum.
G.M. Singhvi, chairman of the Indian Jute Mills Association (IJMA), however, accuses the cement industry of raising a "bogey of disinformation campaign". "It was unfortunate that the cement industry in its own wisdom had been flouting the provisions of the mandatory jute packaging order soon after the enactment of the Act," he said at a press meet recently (Cement makers have not been using jute bags for years, in spite of the JPA). However, statistics from IJMA itself belie some of the apprehensions of the jute industry. In 1995-96, jute production was 75 lakh bales while consumption was as high as 86 lakh. The reducing acreage under jute cultivation is unable to meet the present demand. As a result, the jute industry will indeed be hard-pressed to meet the demand for additional packaging for the cement industry.
Says R. Parthasarthy, general secretary, Cement Manufacturers Association (CMA): "The bogey of farmers interests which have often been projected as the chief reason by the jute industry for insisting on jute bags for cement, needs to be abolished. " He cites a recent study done on the West Bengal farm sector which reveals that the sector does not depend on jute as its main source of activity as is the general perception. Instead of blaming the cement industry, the jute industry should invest in value added products, he says, and "stop depending on artificial fiats like the compulsory packing order".
Changing the structure of the industry would be another answer. "The need of the hour," says L.V. Saptharishi, chief of National Programme Management (Jute) till 1995, "is to shift from weaving sacks to producing jute yarn of the quality and type that the present market demands." This can only happen if mills invest in new technologies and processes. Saptharishi visualises that gradually, many leading jute mills would become pure spinning mills concentrating on production of yarn only as is the case with the textile industry. The Indian Government along with the United Nations Development Programme (UNDP) has also undertaken a five-year programme beginning 1992 to find new sectors for the existing raw jute yields.
Clearly, the fight is for the interim period especially for the cement manufacturers who have so far ignored the JPA under various pretexts. More than the farmers, it is the jute mills and its workers who are insisting on 50 per cent offtake of jute sacks by the cement industry. The fact that demand for jute sacks by the foodgrain sector itself will far exceed the supply appears to have taken a back seat. And so has the customers perspective. Rather unfortunate, in an economy thats only beginning to open up.
