India's Jute Economy
Jute MSP and Prices
How the government sets a minimum support price for raw jute, how the Jute Corporation of India buys when prices fall, and why prices still swing.
Raw jute has a minimum support price (MSP).
MSP
The government announces an MSP for raw jute each year.
JCI
The Jute Corporation of India, set up in 1971, buys jute from farmers when prices fall below MSP.
Limits
JCI’s buying is limited, so many farmers sell below MSP to traders.
Price swings
Prices swing with harvest size and mill demand.
Price caps
The Jute Commissioner has at times capped raw jute prices to protect mills, angering farmers.
The distress sale
A farmer sells jute to a trader below MSP because the nearest JCI centre is far away.
Thinking MSP guarantees farmers' prices
Procurement is limited.
Key takeaways
- Raw jute has an MSP.
- JCI buys when prices fall.
- Many farmers still sell below MSP.
- Prices swing with harvests.
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