Centre hikes raw jute MSP by 6% to ₹5,650/quintal for marketing season 2025-26

By Pune Media On Jan 23, 2025 14

The Union Cabinet on Wednesday approved a minimum support price of ₹5,650 per quintal for raw jute for marketing season 2025-26. This is an increase of ₹315 or around 6 per cent over the previous marketing season 2024-25.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved the minimum support prices (MSP) of raw jute (TD-3 grade) for marketing season 2025-26.

The higher MSP would ensure a return of 66.8 per cent over the all-India weighted average cost of production. The approved MSP of raw jute for marketing season 2025-26 is in line with the principle of fixing MSP at a level of at least 1.5 times all-India weighted average cost of production as announced by the Union government in the Budget 2018-19.

The government has increased MSP of raw jute from ₹2,400 in 2014-15 to ₹5,650 a quintal in 2025-26, registering an increase of ₹3,250 per quintal or 2.35 times.

The MSP amount paid to jute farmers during the period 2014-15 to 2024-25 was ₹1,300 crore, while during the period 2004-05 to 2013-14 the amount paid was ₹441 crore.

Notably, livelihood of 40 lakh farm families directly or indirectly depends on the jute industry. About 4 lakh workers get direct employment in jute mills and trade in jute.

Last year, jute was procured from 1.70 lakh farmers. Eighty two per cent of jute farmers belong to West Bengal, while Assam and Bihar have 9 per cent each of jute production share.

The Jute Corporation of India (JCI) will continue as Central Government Nodal Agency to undertake Price Support Operations and the losses incurred, if any, in such operations, will be fully reimbursed by the Centre.

“The increase in minimum support price for raw jute is a very good move by the government. It will encourage the farmers to farm raw jute. And, the announcement has come at the right time because in the month of March the sowing starts. So, it is well before the farmers decide about the whole concept of MSP and what protection they will be getting from the government of India,” Sanjay Kajaria, former Chairman of the Indian Jute Mills Association, told businessline.

Volatile prices

Interestingly, according to the Price Policy for Jute, 2025-26 season, released by the Commission for Agricultural Costs and Prices in October last year, wide fluctuations in jute prices had been a matter of great concern and an important contributor to economic problems in the jute sector.

“The market prices of jute, which significantly increased during 2020-21 and 2021-22 and reached at historical level in June 2021, witnessed a declining trend during the last two seasons and fell below the MSP in 2022-23 and 2023-24. In order to ensure remunerative and assured price to farmers, JCI procured about 2.36 lakh bales (of 180 kg each) of jute in 2022-23 and 7.31 lakh bales in 2023-24, highest during the last 15 years,” it said, adding JCI procured about 1.94 lakh bales of raw jute as on October 5, 2024, almost the same quantity as on October 5, 2023, which indicated a significant procurement during 2024-25 season.

The Bureau of Indian Standards (BIS) adopted new five grades (TD-1, TD-2, TD-3, TD-4 and TD-5) as per IS: 271:2020, but most of the jute trade still takes place in the old eight grades system (TD-1 to TD-8), which is not in the interest of farmers. Therefore, the Commission for Agricultural Costs and Prices strongly recommended that the government should take necessary steps to implement a new grading system (TD-1 to TD-5) and ensure that trade takes place in BIS approved five grades.

Published on January 22, 2025

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