The CACP also suggested improving procurement infrastructure, diversifying jute product exports and monitoring subsidized imports from Bangladesh to protect farmers and industry.
The Commission for Agricultural Costs and Prices has recommended strategic interventions such as expanding cultivation area, increasing productivity, strengthening procurement and focusing on diversifying the export basket to address the challenges faced by the jute sector. The Indian jute sector has seen a sharp decline in production over the last two and a half decades due to decline in area.
In its non-policy recommendations for 2026-27, the CACP observed that although research institutes have developed high yielding varieties (HYVs), the variety replacement rate remains low, with old varieties like JRO-204 and JRO-524 still covering a large part of the jute area. The government provides HYV-certified seeds to farmers under the JuteICARE program and the National Food Security and Nutrition Mission-Commercial Crops (Jute), but coverage is limited.
Therefore, the CACP recommended that the Government of India, with active participation of State Governments, should prepare a strategic action plan for large-scale dissemination of quality seeds of new varieties and ensure their timely availability at affordable prices to jute growers, thereby improving VRR.
Further, the CACP reiterated its earlier recommendation to set up an expert committee to examine the long pending issue of difference in production estimates between the Ministry of Agriculture and the Jute Advisory Board. There is considerable variation in jute production estimates of the Ministry of Agriculture and the Jute Advisory Board/Expert Committee on Jute, which adversely impacts decision making including price policy recommendations and business decisions. Although the deviation has reduced in recent years, it is still high, the CACP observed.
It also recommended that the premium for better grades TD-1 and TD-2 and rebate for lower quality TD-4 and TD-5 should be increased relative to the MSP to encourage production of better grade fibres. Most of the jute produced in the country is of low quality (TD-4 and TD-5), suitable for mandatory packaging under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987. CACP said that the premium in MSP for better grades and relative discount in MSP for inferior grades has declined/stagnant over the years, which does not encourage production of better grade fibres. Further, mandatory use of jute packaging material should be gradually reduced to ensure availability of raw jute for diverse jute goods.
The crop advisory body also recommended that efforts should be made to promote mechanization in jute cultivation by encouraging farmers to use seed drills and nail weeders for line sowing as well as other equipment for weeding. Labor costs constitute more than three-fourths of the total production cost of jute.
Noting that the presence of Jute Corporation of India is still limited due to lack of manpower, procurement centers and storage infrastructure, especially in remote and inaccessible areas, CACP suggested that JCI should expand its field-level presence through active participation of States, cooperatives, FPOs and SHGs to ensure a more inclusive and efficient procurement system.
Although India is a net importer of raw jute, it is a net exporter of jute products. Indian exports are highly concentrated, with the top 5 export destinations accounting for 50-70 per cent of exports of various jute commodities, making Indian exports vulnerable to external economic and trade shocks. The United States is a major market for Indian jute products, and recent tariff increases have created uncertainty. Therefore, there is a need for proactive strategies to mitigate such risks by diversifying the export basket and markets of jute products, CACP said.
Furthermore, CACP found that Bangladesh, the largest exporter of jute and jute goods, offers various export incentives that adversely impact Indian jute farmers and industry. “To protect farmers and industry from unfair competition, there is a need to take corrective measures to monitor imports of jute and jute goods and restrict subsidized imports from Bangladesh and other neighboring countries,” it said.
Published on February 25, 2026
