CALCUTTA, July 15: The Union ministry of textiles has deferred till August the move to make it mandatory for jute mills to buy fibre from the Jute Corporation of India for supplying B Twill bags to the government.

The decision was taken by the jute commissioner on behalf of the Union government on Monday, after sharp protests from the jute industry. The textile ministry is likely to place an order of 2.5 lakh bales of B Twill jute bags during the month of July.

Industry sources said the jute commissioner's office is also thinking of changing the modalities of the proposed linkage. ``The modalities mentioned in the initial letter from the Jute Commissioner's office dated July 8, were too tough to accept. So it is thinking of changing the terms of agreement. The industry's views will be considered,'' the sources said.

Jute mill owners were upset over the proposed linkage as they have to pay a higher price of raw jute to JCI. Though textiles ministry officials noted that the higher price will be factored into the selling price of the B Twill bags, the industry felt that it was being made the scapegoat.

``This linkage is generally worked out during the offloading period. But now, it is the procurement season as the jute year (July- June) has just started and we are not eager to pay an extra Rs 200 a quintal for the raw jute,'' a mill owner said.

JCI is offering TD-4 at Rs 847 per quintal. However, in the ready market TD-4 from South Bengal is available at around Rs 760 a quintal and the official minimum support price is Rs 686 a quintal. The mill owner added, ``Moreover we were asked to open a letters of credit or bank draft, while applying for the order. So if a mill does not have the money then it will not qualify for the order.''

The jute industry is going through a demand recession and government orders can work out as a relief, as it is the largest buyer of jute sackings.``This is an artificial way of reviving an organisation.

Linkages are only short-term measures and JCI needs long-term policies. The government must also release the funds, so that JCI can operate in the market, otherwise linkages will only be called political gimmicks,'' an industry observer said.

Last week the Jute Corporation chairman made a strong effort to get the corporation out of the red and met the union commerce minister.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.