TWO MONTHS ago, a massive strike by 18 trade unions threatened to completely hogtie work in the Rs 6,500-crore jute industry. On December 1, the unions went on an indefinite strike, demanding higher wages and settlement of pending financial negotiations.
The managements and workers of jute mills have been caught in a tussle over basic wage structure for almost a decade: the industry faced a 63-day strike between January and March 2007. “Our demands are not new. Industrialists are not following the basic laws. They have fixed our dearness allowance and tell us to forget about provident fund and gratuity,” Subroto Mukherjee, INTUC national vice-president, told TEHELKA. INTUC sources say the jute industry owes workers Rs 300 crore in provident fund and Rs 400 crore in gratuity, accumulated over 15 years. Mill owners say they are reluctant to raise wages because they fear a rise in prices will affect their competitiveness.
A jute bag costs at least double that of a plastic packet, but the industry survives because of the Jute Packaging Materials Act that makes it mandatory for rice, wheat, and sugar to be packaged in jute bags. In the 1970s, cement and fertilisers were also part of the deal, but the plastic lobby succeeded in weaning them off. The recent ban on plastic packaging for food staples hasn’t given the jute industry a much-needed boost. Instead, it is the spillover effect of the latest strike, which ended on December 20 with the workers getting a Rs 500 increase in dearness allowance and, predictably, a committee being formed to look into pending dues, that has now begun to show. As of January 20, there was a backlog of 55,000 bales to pack the winter kharif crop, and this spring, the jute industry may not have enough jute bags to pack the rabi harvest. In a high-level meeting in Delhi on January 22, a possible dilution of the Jute Packaging Materials Act was considered — anticipating a huge shortage of sacks.
According to the minutes of the January 22 meeting, a copy of which are with TEHELKA, Food Ministry joint secretary Siraj Husain indicated that there was a likely shortage of 5.76 lakh bales for the rabi crop procurement season. The jute industry has been supplying 1 lakh bales per month, and even if it were to reach its maximum capacity of 1.75 lakh bales, there would still be a shortage of 3.2 lakh bales. So, when the rabi harvest comes in March, staples like rice and wheat could rot unpacked, apart from a shortage in distribution and retail centres. To avoid a law and order catastrophe, the Ministry of Textiles has already decided to relax the order for 2-lakh bales.
India is the world’s largest grower of jute, but a decline in jute consumption the world over has meant that the industry has to depend on the protected domestic market for survival. However, despite attempts by the jute lobby, the order is not permanent, and is reviewed each year. Its dilution has already begun, and its revocation will leave a labour-intensive industry in tatters. Of the 77 jute mills in India, 60 are in West Bengal, employing about 2.5 lakh workers directly. It is estimated that 1.5 crore people in West Bengal depend on the jute industry, including jute farmers, traders and brokers. “The beleaguered jute industry is passing through a critical phase where the raw jute market has become volatile due to black marketing and speculation,” alleges Sanjay Kajaria, chairman of the Indian Jute Manufactures Association (IJMA). The steadily-declining crop levels haven’t helped: the total crop in 2008-09 is estimated to be 75 lakh bales, compared to 93 lakh bales the previous year.
But the labour problems seem intractable as well, enhanced by a decrease in labour migration from Uttar Pradesh and Bihar. Raghav Gupta, who entered the industry in 1999 and worked under jute baron Arun Bajoria, now owns the Fort William Jute Mill. In the last decade, he’s seen three lockouts. “It’s been a rough ride. Many times we haven’t reached even 70 percent capacity ultilisation because of acute labour shortage,” he says. Ironically, this hasn’t spurred the industry to take the demands for better wages more seriously. Another challenge is the lack of technology. “We continue to work with outdated machinery and technology. There has been very little innovation,” he says.
SURBHI BAJORIA, 21, Arun’s daughter, agrees that the family of the largest jute baron has also seen challenges: they’ve had to consolidate and sell two of their 11 mills.
Sanjay Bagaria, whose great grandfather established the Mahadeo Jute Mill, says his family was also one of the largest exporters of raw jute. But since exports declined, they set up a manufacturing unit. He admits the industry is partly to blame. “When there is a bumper crop, we try to suppress prices. When the farmers don’t get remunerative prices, they reduce output, preferring other cash crops,” he says, and hopes the government will give subsidies to encourage jute cultivation.
Worried about the future, the jute industry has, for the first time, asked the government to accept alternate forms of jute bags other than traditional b.twill sacks, to meet the 2009 rabi crop needs.
“We are really scared,” says RK Poddar, a leading first-generation jute baron in Bengal. “This situation has come because the government did not plan and phase its requirements. We are being paid on the basis of an outdated 2001 Tariff Commission Report. The government needs to correct this. If the order is diluted, we will lose 40 percent of our market and many mills will have to shut down.” Lobbying the ministries for a change in outdated pricing, Kajaria remains firm. He boldly avers that “under no circumstances shall the jute sector allow dilution of the mandatory jute order”. Strong words, but ensuring they are carried through might well be a tall order.