The country’s languishing jute sector is getting a boost from the Mandatory Jute Packaging Act which requires major agricultural commodities including rice, wheat, sugar and fertilisers to be packed in locally produced jute sacks.
To promote the sector, the government began to implement the Mandatory Jute Packaging Act 2010 on November 30 this year. The creation of local demand by government fiat is expected to bolster the jute sector, which has taken a hit from competition from synthetic packing.
Major agricultural commodities including paddy, rice, wheat, maze, fertilisers and sugar must now be packed in local jute packing. Violators face a maximum of one year in jail or a fine of Tk50,000, or both, for using non-biodegradable synthetics to pack commodities.
Rice millers, considered a key element in the success of the initiative, were initially unwilling to use jute for various reasons, including an alleged shortage of jute sacks. But since November 30, most millers have started using jute packing, following pressure from the government through the mobile courts.
“We have had an 80% success rate in implementing the act now that most rice millers are using jute sacks,” said Mohammad Kefaetullah, director of the government’s jute department.
Kefaetullah said rice millers alone use around 360 million jute sacks each year. “If just jute sacks were used instead of polythene in this sector alone, the whole situation would change,” he said.
Nirod Baran Saha, convener of the Naogaon Rice Millers Association, said millers had started using jute sacks as per the law, but said the price of rice had increased slightly due to higher packing costs.
“Since November 30, we have been using locally produced jute sacks. I fear there could be a shortage of the material next month when the rice harvest arrives,” he said.
But Humayun Khaled, chairman of the Bangladesh Jute Mills Corporation (BJMC) told the Dhaka Tribune that the government has the capacity to meet year-round and seasonal demand for jute sacks. “Rice millers have long claimed that shortages are likely – even inevitable – but the claim is totally baseless.”
The BJMC appointed hundreds of dealers across the country a year ago to fulfil millers’ orders. But rice millers say they do not want to deal with the sack dealers because they are not willing to supply sacks on credit.
“We millers have run our business on cash and credit for as long as I can remember, but sack dealers want cash in advance. This is totally unacceptable for us,” Nirod said.
There are 24 government-owned jute mills in Bangladesh, of which 22 spin jute while the remaining two produce machinery for the mills.
Due to a shortage of funds, the BJMC has in the past been unable buy sufficient raw jute from farmers on time and on a regular basis, negatively impacting both farmers and mills.
To address this, the government recently allocated Tk100 crore to procure raw jute from farmers.
Around 7 million bales of raw jute are produced annually in Bangladesh. According to the International Jute Study Group under the United Nations Conference on Trade and Development (UNCTAD), some 3.5–4 million farm families are involved in the production of jute.
BJMC Chairman Humayun Khaled said the Mandatory Jute Packaging Act, if implemented properly, will boost the jute sector, with mills running around the clock. He said it would help protect 66,000 BJMC labourers’ jobs.