Raw Jute MSP Increased by Rs 285 for FY25

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved the minimum support price (MSP) for raw jute for the 2024-25 season. The MSP of raw jute (TDN-3 equivalent to earlier TD-5 grade) has been fixed at Rs 5,335 per quintal, an increase of Rs 285 over the previous season. This decision is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP) and is in line with the principle of fixing the MSP at a level of at least 1.5 times the all-India weighted average cost of production.

Benefits for farmers

The MSP for raw jute will ensure a return of 64.8 percent over the all-India weighted average cost of production, which is estimated at Rs 3,238 per quintal for the 2024-25 season. This will provide a fair and remunerative price to the jute growers and encourage them to increase the area and productivity of the crop. The MSP will also act as a floor price for the market and protect the farmers from any distress sale.

In the current season 2023-24, the government has procured a record amount of more than 6.24 lakh bales of raw jute, at the cost of Rs 524.32 crore, benefitting around 1.65 lakh farmers. The Jute Corporation of India (JCI) will continue to act as the nodal agency for undertaking price support operations and the losses incurred, if any, will be fully reimbursed by the central government.

Impact on industry

The MSP for raw jute will also have an impact on the jute industry, which is mainly dependent on the domestic supply of raw material. The jute industry employs about 3.7 lakh workers and supports the livelihood of around 40 lakh farm families. The industry produces various products such as hessian, sacking, carpet backing cloth, yarn, etc., which have both domestic and export demand.

The increase in MSP for raw jute may lead to an increase in the cost of production for the jute mills, which may affect their profitability and competitiveness. However, the industry may also benefit from a stable and adequate supply of raw jute, which will enable them to meet their contractual obligations and cater to the growing demand for eco-friendly jute products.

The government has also taken various measures to support the jute industry, such as mandatory packaging of foodgrains and sugar in jute bags, financial assistance for modernization of jute mills, promotion of diversified jute products, etc.

Conclusion

The government’s decision to raise the MSP for raw jute by Rs 285 to Rs 5,335 per quintal for the 2024-25 season is a welcome step for ensuring a fair price to the farmers and boosting their income. It will also have implications for the jute industry, which may face higher input costs but also enjoy a steady supply of raw material. The MSP for raw jute reflects the government’s commitment to promote the welfare of both farmers and industry in line with its vision of Atmanirbhar Bharat.

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