The Agriculture Ministry in order to boost jute production has proposed hike in minimum support price (MSP) of raw jute because its cultivation has been declining in the recent year.

In the Cabinet note, Agriculture Ministry has proposed an 18.5 percent increase in jute MSP to ₹3,200 a quintal for 2016-17, which is in line with the CACP’s recommendation, according to sources.

In 2015-16, the jute support price was fixed at ₹2,700.

The Commission for Agricultural Costs and Prices (CACP) is a statutory body that advises the government on the pricing policy for major farm produces.

Jute is not only raw material for jute mills, which employ 3.75 lakh workers but it also provides livelihood to more than 40 lakh farmers in West Bengal, Assam, Odisha and eastern Bihar.

Keep this in mind, the Textile Ministry has sought an MSP of ₹3,650/quintal, while other ministries and even Niti Aayog have pitched for marginal increase in the jute MSP by ₹300 a quintal, keeping in view the inflationary trends, according to sources.

The raw jute cultivation area has reduced to 7.5 lakh hectares in 2015-16, from little over 8 lakh hectares last year.