For the last two decades, a lot of promises were made by the authorities for reviving the jute industry of the country, which once earned the lion's share of its export revenues through shipment of jute and jute goods.
The golden days of this sector started to fade away from the late 1970's mainly due to the introduction of man-made artificial fibres, as it triggered huge fall in the demand for jute worldwide.
However, in recent times, the use of inorganic materials like synthetics have been discouraged in countries that are highly sensitive about environment issues.
This trend has paved the way for the revival of the jute sector. As the largest jute producing country of the world, Bangladesh should be in a comfortable position to fetch huge foreign exchange through jute exports but unfortunately this could not be done due to the lack of proper initiative by both public and private sector.
Recently, the Federation of Chambers of Commerce and Industry (FBCCI) said that it would collaborate with entrepreneurs in the jute sector, as well as government and private sector stakeholders, to address the industry's current challenges.
This is a welcome step towards reviving the past glory of jute, which earned the fame as 'golden fibre of Bangladesh' for its cash-generating capacity.
One of the problems of our jute industry is its lack of diversification of products which is crucial to boost exports.
The entrepreneurs should concentrate on more innovation in diversifying their products. Though some small entrepreneurs recently started to produce different varieties of jute goods, the big names in the industry should come forward in such ventures.
The steps, which are urgently required to rejuvenate the sector include withdrawal of 2 per cent source tax on raw jute, implementation of the Jute Wrapping Act 2010 fully, banning of the use of polythene, initiation of appeals against anti-dumping measures, designating jute products as agricultural products, establishing a Jute Sector Development Fund (JSDF) to support the industry, and providing a 30 percent subsidy for modernising jute mill machinery.
Besides, the entrepreneurs, for long, have been demanding the availability of low-interest-bearing bank loans, adjusting tax rates on jute exports, increasing cash assistance to 20 per cent for various jute products, waiving tax at source on export incentives, ensuring the supply of high-yielding jute seeds, and making raw jute production, consumption, and export statistics accurate.
The government should set up a special task force to consider these demands.
Industry people feel that the 2 per cent source tax on raw jute affecting farmers and traders, is potentially discouraging jute production and disrupting the industry. They also called for the mandatory use of jute wrapping, as stipulated in the Jute Wrapping Act 2010, to boost domestic demand for jute products.
In 2016, Bangladesh government signed an MoU with Chinese government for modernising the ailing state-owned jute mills . China has agreed to provide over several hundred million dollars for this project but due to unknown reasons the government two years ago backtracked from this project.
As the closed state-owned jute mills has huge infrastructure, these can be a major contributor to the jute sector once they are modernised.
Most of the public sector jute mills have been closed citing their poor fiscal performances. But age-old machinery and mismanagement were the prime reasons behind this. Naturally, questions have been raised whether such an opportunity to modernise the mills with Chinese help should be missed.
Still, thousands of farmers are dependent on jute cultivation and a vibrant jute sector will surely help them in generating more income. Unlike the RMG sector, which is receiving huge cash benefits from the government, the value addition in this sector is also 100 per cent.
So for picking up the growth momentum of the economy, jute sector needs to be revived through comprehensive and prudent steps.
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