Wheat procurement has now hit an unusual problem — lack of jute bags
New Delhi: A lack of coordination between the Narendra Modi government and the Mamata Banerjee administration in West Bengal has resulted in an unusual problem, which in turn has severely hit wheat procurement across the country. The problem is shortage of jute gunny sacks that are crucial to store and transport the crop.
West Bengal supplies 95 per cent of the country’s jute sacks but the state had initially shut all its mills due to the Covid-19 lockdown, though jute mills are covered under the Essential Commodities Act. It only let the mills function from 20 April, but with limited workforce due to social distancing norms.
The problem was compounded as the Modi government, prompted by the lull in production, issued conflicting advisories, in the middle of the procurement season, to the states that needed gunny sacks for the wheat.
The wheat procurement season traditionally lasts from 1 April to 15 May. The Centre pays the MSP for wheat and other crops but leaves to the states the procurement process that includes groundwork such as securing, packing and transporting the crop to godowns of the Food Corporation of India (FCI).
The shortage of sacks has now led to an 18 per cent decline in wheat procurement across the country, which fell to 226.85 Lakh Metric Tonnes (LMT) as of 8 May this year, compared to the 277.83 in the same period in 2019.
Take for instance Punjab and Haryana, two of the biggest wheat producers in the country.
Punjab had set a wheat procurement target of 135 LMT this rabi season but has only managed to procure 108 LMT as of now. Haryana has fared even worse, managing to procure only 57 LMT as against its target of 100 LMT.
Both states, which earlier faced shortage of labour, have cited the lack of gunny sacks as the primary reason for the slow procurement process.
Secretary, Food, Civil Supplies and Consumer Affairs, Punjab, KAP Sinha told the media in the last week of April that the state was grappling with a shortage of gunny sacks as jute mills in West Bengal were shut.
This has had a cascading effect down the chain, with farmers complaining that their produce is being left to rot at the procurement mandis (markets).
“There is every arrangement to procure wheat here, but despite getting my token for the second time in the last five days, I couldn’t sell my produce in the mandi even once due to lack of gunny sacks,” Karnail Singh Mann, a farmer from Punjab’s Moga, told ThePrint. “We have pleaded with the authorities to at least get us plastic sheets as the rain may spoil our crop if it lies exposed in our tractors.”
Mann added that he is yet to sell about 480 quintals of wheat he has harvested until now. “If the administration can’t provide the gunny bags, we will have no other option but to sell the produce to private traders at below the Minimum Support Price (MSP) because we have to pay double the transportation cost otherwise,” he added.
The rabi harvest this year has almost matched the level of the previous year despite the nationwide lockdown.
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Centre’s flip-flops leaves states in a flux
The central government had first allocated 20 lakh bales of jute sacks (each bale contains 500 gunny bags) for the wheat procurement season. Of this, 3.87 lakh bales were to go to Punjab and 3.20 lakh to Haryana.
But 16 days into the lockdown, the Centre revised the jute bag allocation to the states citing a backlog and sluggish manufacturing in West Bengal.
According to a letter dated 10 April, accessed by ThePrint, the Union Ministry of Consumer Affairs capped the supply of jute bags at 2.94 lakh bales for Haryana and 3.36 lakh bales for Punjab. In all, the ministry revised the countrywide allocation of jute bags to 16.22 lakh bales.
The ministry then told the states to make up for the deficit through polymer bags, which the states had to procure on their own through tenders.
However, the textiles ministry, which oversees the process, set the limit for polymer bags at 6.21 lakh bales countrywide. Of this, Haryana was allocated 0.61 lakh bales of plastic bags whereas Punjab was allocated 0.40 lakh bales of plastic bags.
“The central government at the last moment informed us that there will be a shortage of jute gunny sacks due to closure of jute mills in West Bengal after Covid-19,” a Punjab civil supplies ministry official familiar with the matter told ThePrint. “The government also informed us that we should place orders for plastic bags.”
Towards the end of April, however, the crisis was aggravated after both Punjab and Haryana further revised their orders for gunny sacks.
In a letter dated 30 April, the Union Ministry of Textiles informed jute mills in West Bengal that it was cancelling orders for jute sacks as Haryana had capped its order at 2.49 lakh bales as opposed to its earlier 2.94 lakh bales. Punjab too stopped its order at 2.51 lakh bales from the earlier 3.36 lakh bales, the letter added.
The states, however, had to contend with another problem — while tenders had been put out for polymer bags, they were yet to receive them.
“The last-minute order has resulted in a delay in the arrival of plastic bags for procurement,” the Punjab civil supplies officer quoted above said. “Both the state and central governments cancelled the orders for jute sacks as there had been a backlog in supply from West Bengal.”
The officer also said Punjab is short of at least 30,000-40,000 gunny sacks for wheat procurement as the state has jute and plastic bags for just 115 LMT of wheat as against its 135 LMT target.
To tide over the crisis, the Punjab State Civil Supplies Corporation has now asked the state education department to buy jute sacks from government schools in the state. The schools get their ration of wheat and rice, for their Mid-Day Meal Schemes, delivered in jute sacks.
The schools have been asked to hand over their empty sacks at Rs 25/kg. A new jute gunny sack costs Rs 50/kg.
The problem, however, isn’t confined to Punjab and Haryana alone.
Gaya Prasad, a wheat farmer from Gorakhpur in Uttar Pradesh, told ThePrint, “About 70 percent of the crop has been harvested in my village but we are yet to sell even a half of it. Even though the government has announced that wheat is being procured in mandis and purchasing centres, the process has stopped due to a lack of gunny sacks.”
“There is often a tussle with the in-charge at the purchasing centre and we can’t take our produce back there again,” he added. “That would mean double the cost of labour and transportation if we unload and load the hired vehicle with wheat due to no procurement.”
Prasad added that the kharif sowing season was approaching soon and farmers would require the money from the sale of wheat to buy seeds and other inputs.
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Industry in trouble in West Bengal
The heart of the trouble, however, is in West Bengal where the government didn’t allow the jute mills to function even though they fall under the Essential Commodities (EC) Act. The Trinamool Congress government allowed the mills to operate from 20 April but only with 15 per cent workforce which implies 30-50 workers.
With the mills not functioning, the industry had sent distress calls to both the state and central governments.
On 27 April, the Indian Jute Mill Association (IJMA) had written to Ravi Capoor, Secretary, Ministry of Textiles, asking for an “immediate intervention to facilitate the resumption of operations in West Bengal after complete shutdown of jute mills”.
The association also said “unworkable conditions” were being laid down by the state. It added that while a jute mill requires anywhere between 1,000 and 1,500 workers, only 30-50 were being allowed to work.
Even after the cancellation of orders from the Centre, IJMA wrote to Rajiva Sinha, the West Bengal Chief Secretary, on 2 May with an urgent appeal to “permit resumption of production activity at all jute mills with their entire workforce in West Bengal”.
The letter stated that despite permission from the home ministry to “operate with social distancing and staggered shifts”, the jute industry in the state remains largely closed on the advice of Labour Minister Moloy Ghatak and that only 25 jute mills were allowed to resume production.
The letter added that an independent study by PricewaterhouseCoopers (PwC) regarding conformity to social distancing at jute mills was submitted to the West Bengal chief secretary on 16 April, and a presentation on it was done on 18 April, but no action had been taken so far.
“We had an order of a total of 20 lakh bales of jute from the central government, of which we have supplied only 8 lakh bales. An order of 6 lakh bales, worth Rs 1,400 crore, has already been cancelled,” Sanjay Kajaria, a member of IJMA said. “The rest of the order is also likely to be cancelled now leading to a loss of Rs 2,800 crore from Centre alone.”
According to Kajaria, the jute industry of West Bengal has an annual turnover of Rs 12,000 crore, which is likely to drop by at least 30 per cent this year. “Even now, out of 60 mills across the state, only 7-8 are operational with just 35-50 workers. With such a small workforce it’s impossible to run all the phases of manufacturing processes in the mill,” Kajaria added.
The lockdown has also affected the livelihood of workers, the industries say.
“A mill needs a minimum of 70 per cent of the workforce to make profits,” said Naba Dutta, a member of the Jute Mill Workers’ Union in West Bengal. “Due to the limit on the number of workers allowed by the state government, mill owners are reluctant to open the mills. There are at least 3 lakh registered and 4 lakh unregistered workers in jute industry across West Bengal who are suffering because of this.”
Dutta added that a jute worker earns Rs 200-Rs 500 per day. “Most have run out of money and will have to borrow to survive. They have not received any payment from the management since the lockdown, as most of them are contractual labourers with no provident fund or any social security provision,” Dutta said.
ThePrint tried to reach West Bengal Chief Secretary Rajiva Sinha and Labour Secretary Syed Baba multiple times to get a comment. The report will be updated when they respond.
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