The federal government should promulgate a 'jute mandatory packaging' order on the pattern of India and Bangladesh to save the shrinking domestic jute industry and creating more employment in the rural areas.
There are 12 jute mills in Pakistan but five out of it have become non-operational during the last two years due to various factors including increasing use of synthetic packaging by the government food-grain procurement agencies, Pakistan Jute Mills Association (PJMA) sources told a group of journalists.
PJMA sources said that use of jute bags for packaging of food grain is mandatory in India and Bangladesh as it not only create more employment in rural areas but also mitigate the environmental damage being caused by usage of synthetics as a packing material. Jute being natural fibre is 100 percent biodegradable, environment-friendly and can be used multiple times, the sources added.
Jute millers pointed out that in 2010, jute industry had to face acute shortage of raw fibre because Bangladesh, the largest jute exporter, had imposed complete ban on raw jute exports. In these circumstances, local jute industry could not meet the domestic demand, as it was totally dependent on imported raw material from Bangladesh and India. However, the industry was back on track after removal of ban on raw jute exports by Bangladesh, but the government is still giving preference to polypropylene packaging for wheat and grains, which is health hazardous, they claimed.
Discussing other problems being faced by the jute mills, the sources said that purchase by government procurement agencies are once in a year, haphazard, unplanned and at time requires deliveries of billion of worth of jute bags overnight. The industry is acting as stockiest for government and thus bearing additional financial cost. They suggested that the government procurement agencies should plan their annual requirement of jute bags and inform the mills about well in advance so they could work smoothly.
Jute millers proposed that in order to resolve the issue of cash flow, government should order jute bag procurement on quarterly basis instead of annual basis. They said that major customers of local jute millers are wheat procurement agencies, rice millers and exporters, flour millers, cotton exporters, vegetable exporters, traders, stockiest and end consumers, while a small portion of products are also being exported.
Talking about the incentives being provided to the sector by India and Bangladesh, sources said that Indian government is providing lucrative incentives to its jute industry under External Market Assistance (EMA) at 20 percent of the manufacturing cost and 25 percent of the cost of new machinery. India is also providing R&D support to the textile industry for product innovation, HRD and consulting services. The sector is integral part of the textile industry. Bangladesh is offering 10 percent subsidy on export of jute goods. It is making Pakistan jute industry uncompetitive in international market. "We urge that we should also be provided the same facility," they demanded.
They stressed that Pakistan needs to focus on jute cultivation locally to save foreign exchange, adding it will also reduce dependence on imported raw material resulting in decrease in cost. PJMA has also launched an initiative to convince the growers for sowing of Jute in some areas of Punjab, and if the efforts succeeded, it could save over US $100 million being spent on import of jute, they maintained. Highlighting the significance of industry, they said it is saving around $250 million in the form of import substitution and helping environment being 100 percent biodegradable natural fibre.
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