'Price cap on raw jute fixed on basis of scientific method; not arbitrarily'

New Delhi: The central government has fixed the price cap of Rs 6,500 per quintal on raw jute on the basis of scientific methodology which is in line with the market trend prevailing at that point of time and not arbitrarily, official sources said on Tuesday.

The upper cap of Rs 6,500 per quintal was fixed by the Jute Commissioner's office on September 30, 2021, for 2021-22.

"The West Bengal government suo moto recommended to fix the upper cap of raw jute price at Rs 6,000 per quintal in December 2020, which is lower than the upper cap of Rs 6,500 per quintal fixed by the Jute Commissioner's office," one of the sources said.

Senior BJP leader and MP Arjun Singh has criticised the central government for "neglecting" West Bengal's jute industry and threatened to hit the streets if the issue related to the capping of raw jute prices is not resolved at the earliest. He has also supported West Bengal Chief Minister Mamata Banerjee's demand to remove the price cap on raw jute in the open market.

The sources said that so far, no farmer or farmer bodies have either orally or in writing lodged a single protest or objection on the price fixation.

At present, almost no jute of the current season is being held by farmers and in fact, jute lies with middlemen/traders and even with mills in their own name or in the name of third parties at various places.

They said that relaxation in the upper price cap will only accrue illegitimate financial gains by these parties and no benefit will accrue to farmers.

"The fixation of raw jute price at Rs 6,500 per quintals was not arbitrary and was incoherence to the market trend prevailing at that point of time," a source said. The Commission for Agricultural Costs and Prices (CACP) in its report for 2021-22 has estimated the production cost of raw jute at Rs 2,832 per quintal and MSP (minimum support price) was fixed at Rs 4,500 per quintal with more than 50 per cent profit margin for farmers.