Experts suggest price support and compulsory domestic use
Khawaza Main Uddin
The country’s jute sector, affected further by the global recession, now deserves ‘minimum support price’ and compulsory use of the fibre in certain public sector programmes to give incentives to both farmers and entrepreneurs, suggest experts.
With exports of jute goods declining drastically, they feel that the government should come up with a special package for the jute sector to protect jute industries, especially the spinning mills, from the adverse impacts of the global financial crisis, and encourage more farmers to grow jute.
The experts insist that the government should give a ‘clear signal’ to the farmers, based on a policy to guarantee a minimum price as a contingency measure, so that the cultivation of jute does not decrease drastically for fear of lower prices in the coming season.
Jute, one of the key export sectors that are threatened by the global crisis, is likely to be discussed at tomorrow’s scheduled meeting of the taskforce assigned to suggest measures for overcoming the fall-out of the global recession.
An international conference on the prospects of jute in Dhaka in February also called for declaring a minimum support price for raw jute to save the farmers and revive cultivation of the natural fibre, which should have a good market in a world that is rapidly becoming aware of the importance of using organic materials.
The collapse in the US’s housing industry and spill-over impacts of the American meltdown on the European economies has caused a nosedive in the demand for carpets, eventually reducing the demand for Bangladeshi jute yarn in the international market. Export of jute goods plunged by 18 per cent in the period between July and December 2008, according to official statistics.
‘The state of the jute sector is not good at all. It is high time to consider minimum support price and other medium and long-term incentives to make the sector competitive. Development of the domestic market is very important for overcoming the crisis,’ Khandakar Golam Moazzem, senior research fellow of the Centre for Policy Dialogue, told New Age on Sunday.
He said that jute yarn manufacturers, severely affected by the current crisis, should be provided with enhanced cash incentives or suspension of bank interest on their loans, and the government should consider writing off the bank loans of the state-owned mills and give them budgetary support.
Sudripta Roy, secretary-general of the International Jute Study Group, came up with specific suggestions, saying that the government of Bangladesh has the scope, following the Indian model, to enforce compulsory use of jute bags in the packaging of public sector food-grains for the time being. Almost 80 per cent of the jute produced in India is consumed by the domestic market for that purpose, he added.
Both the experts pointed out that use of jute in ‘geo-textiles’, now under serious research, was the ultimate solution to the jute crisis.
‘Also, the technology of soil saving by using jute bags is already a proven one and it does not require even high quality jute. Bangladesh will not be able to meet the domestic demand if jute is used in road construction projects and for river embankments,’ said Sudripta.
Moazzem mentioned that the government would have to think of development of the domestic market for jute and jute goods, apart from focusing on diversification of jute products to target the international market.
Recently, the country’s jute yarn factories slashed production by 30 per cent due to the fall in global demand, according to the Bangladesh Jute Spinners Association. This sector has reportedly retrenched about 25,000 jobs from yarn and hessian mills.
Bangladesh’s jute sector directly employs about 1,25,000 people and has more than 20 million farmers involved in growing jute as a cash crop.
Courtesy of Newage
