The cabinet’s approval of the 2016 Jute Law raises the prospect of more stringent enforcement of the Mandatory Jute Packaging Act 2010.
For this act which requires essential products, such as paddy, fertiliser and sugar to be packaged with jute sacks, to deliver its aim of reducing use of less environmentally friendly synthetic packaging, the Bangladesh Jute Research Institute estimates an additional 1.5 million bales of jute will need to be manufactured.
The best way to achieve this will be for the government to stop forcing private sector jute mills to compete with endlessly-subsidised state-owned jute mills.
State-owned jute mills have a long history of losses exacerbated by poor management and corruption. The government should not be committing more public money to keep them open. The increase in local demand enabled by the Jute Law should not be used as an excuse to squander further tax-payer funds on propping up inefficient jute factories.
Instead, the government should either allow loss-making state jute mills to be managed by the private sector or use their land to develop new industrial parks for other higher value manufacturing.
This would free up private jute mills to plan ahead and efficiently invest in growing their capacity to meet demand.
It is the best means available to allow Bangladesh’s jute processors to catch up with the major jute industries of China and India, which dominate 70% of the international market.
With worldwide demand for jute and jute-based products growing due to its durability and environmental advantages, there is a golden opportunity for the nation’s jute industry to reinvigorate itself by taking advantage of Bangladesh’s status as a major producer.
It must not be wasted.