CACP also suggested improving procurement infrastructure, diversifying jute product exports, and monitoring subsidised imports from Bangladesh to protect farmers and industry.
The Commission for Agricultural Costs and Prices has recommended strategic interventions such as focusing on expanding the area under cultivation, enhancing productivity, strengthening procurement and diversifying the export basket to overcome the challenges faced by the jute sector. The Indian jute sector has experienced a sharp decline in production over the past two and a half decades, driven by a decline in acreage.
In its non-policy recommendations for 2026-27, CACP observed that although research institutes have developed high-yielding varieties (HYVs), the varietal replacement rate remains low, with older varieties such as JRO-204 and JRO-524 still covering a large share of the jute area. The Government provides HYV-certified seeds to farmers under the JuteICARE programme and the National Food Security and Nutrition Mission-Commercial Crops (Jute), but coverage is limited.
Therefore, CACP recommended that the Government of India, with active participation from the State Governments, should prepare a strategic action plan for large-scale multiplication of quality seeds of new varieties and ensure their timely availability at affordable prices to jute growers, thereby improving VRR.
Further, CACP reiterated its earlier recommendation to constitute an expert committee to examine the long-pending issue of the difference in production estimates between the Agriculture Ministry and the Jute Advisory Board. The jute production estimates from the Agriculture Ministry and the Jute Advisory Board/Expert Committee on Jute differ significantly, which adversely affects decision-making, including price policy recommendations and business decisions. Although divergence has narrowed in recent years, it is still high, CACP observed.
It also recommended that the premium for the superior grades TD-1 and TD-2, and the discount for the low-quality TD-4 and TD-5, should be increased relative to the MSP to incentivise the production of the superior-grade fibre. The majority of jute produced in the country is of low quality (TD-4 and TD-5), which is suitable for sacking for mandatory packaging under the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987. The premium in MSP to the superior grades and the relative discount in MSP to inferior grades has declined/stagnated over the years, which does not incentivise production of superior grade fibre, CACP said. Further, the compulsory use of jute packaging material should be gradually reduced to ensure the availability of raw jute for diversified jute goods, it said.
The crop advisory body also recommended that efforts be made to promote mechanisation in jute cultivation by encouraging farmers to use a seed drill for line sowing and a nail weeder, as well as other implements for weeding. Labour costs account for over three-fourths of the total production cost of jute.
Observing that the presence of Jute Corporation of India is still limited, particularly in remote and inaccessible areas, due to a shortage of manpower, procurement centres and storage infrastructure, CACP suggested that JCI should expand its field-level presence through active involvement of states, co-operatives, FPOs and SHGs to ensure a more inclusive and efficient procurement system.
Though 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 goods, making Indian exports vulnerable to external economic and trade shocks. The USA is a key market for Indian jute products, and the recent tariff hike has created uncertainty. Therefore, proactive strategies are required to mitigate such risks by diversifying the jute products export basket and markets, the CACP said.
Further, the CACP observed that Bangladesh, the largest exporter of jute and jute goods, provides various export incentives that adversely affect Indian jute farmers and industry. “In order to protect farmers and industry from unfair competition, there is a need to monitor imports of jute and jute goods and take corrective measures to restrict subsidised imports from Bangladesh and other neighbouring countries,” it said.
Published on February 25, 2026