In what could delay the coming year’s wheat procurement operations, the Punjab government has deferred placing orders for the gunny bags this season citing a financial crunch. Instead, the state government has asked the Food Corporation of India (FCI) to buy jute bags for it. Alternatively, it said, the Centre may make an advance payment of R1,500 crore for the gunny bags.
Official sources told FE that in November and December 2014, the Punjab government did not place orders for jute bags despite the projected requirement of 50,000 and 1.5 lakh bales, respectively, during these months to facilitate wheat procurement operations for the next year.
Such orders are usually placed with the the Directorate General of Supplies and Disposals (DGS&D), a body under the commerce ministry.
As most jute gunny bags are sourced from West Bengal, the order had to be placed in advance for getting the supplies on time, a senior official said. Punjab needs more than 3.5 lakh bales of gunny bags for carrying out wheat procurement operations for the next rabi marketing season commencing April 2015. The state is the biggest contributor of foodgrains to the Centre’s procurement drive.
Under the Jute Packaging Act, 1987, the use of jute bags is mandatory for packing foodgrains and other materials beyond 25 kg a pack.
The FCI and state government agencies procure jute bags through DGS&D after assessing the requirement before each marketing seasons, rabi and kharif. Following this, indents are issued and DGS&D conveys the requirement to the jute commissioner, who places the orders with jute mills. “We are in talks with the Punjab government to sort out the issues regarding the procurement of gunny bags,” an official said.
As a contingency measure, the food ministry is expected to provide about 1.5 lakh bales of leftover gunny bags from the previous year’s procurement to the Punjab government if the delivery is delayed.
An official with the Punjab government’s food and supplies department said that there is a need for flexibility to provide alternative sources of procurement of bags to supplement recurrent shortages in the supply of gunny bags.
The official also said that since Punjab was the biggest buyer of gunny bags, the state should have a representative on the advisory committee of the textiles ministry. Earlier, Punjab had requested to store and distribute foodgrain in 30 kg polyethylene packs, against the 50-kg packs the FCI uses, but was turned down by the food ministry.