Experts: Subsidise jute industry to save local economies

The government decision to shut down 25 state-owned jute mills in early July and the recent closures of several state-owned sugar mills have heavily affected the local economies of the areas where the mills were situated, according to a recent study.

The jute industry should be subsidised to save local economies  instead of shutting down the mills and offering compensation for workers, the study recommended.

Although the government said that around 50,000 workers of the closed mills would be compensated, many of the workers are yet to see any of this compensation, it added.

Of the 25,000 permanent staff of the closed mills, at least a quarter are yet to be compensated, the study said.

The study, which has been published in the social, political and economic affairs quarterly Sarbajankatha, was unveiled during a press conference at Dhaka Reporters Unity on Monday. Researcher Dr Maha Mirza and Dhaka University Professor Moshahida Sultana disclosed the findings.

Eminent social activist and Jahangirnagar University Professor Anu Muhammad presided over the press conference.

Addressing the event, Prof Anu Mohammad said: “Eco-friendly industries are being sought all over the world, but jute industries with huge potential are being shut down in Bangladesh through coercion, deception and lies. Sugar industries are being destroyed by building sugar import roads. 

“Garment and rental power industries are given thousands of crores in subsidies every year. If they gave Tk1,000 crore in subsidies to the jute industry, then the industry could be turned around,” he added.

Regarding sugar mills, the report said Bangladesh was threshing sugarcane significantly less efficiently than other countries due to the use of old technology. Bangladesh is extracting sugar at 6-8% efficiency, as compared to 12-14% in India and Brazil.

The study said many small enterprises, such as restaurants, grocery stores, furniture and clothes shops, had closed down in the areas where the mills were situated.

It also said 31 out of 75 industries that were privatized from 1993 till 2010 have shut down, and so the government’s argument that privatization was the only way to expand and save the jute industry did not have any real basis.

Dhaka University Professor Mohammad Tanjim Uddin Khan, jute mill worker Abdul Halim Mithu and retired sugar mill officer Ferdous Imam also addressed the program.

On July 2, the government decided to shut down production in 25 out of 26 state-owned jute mills due to mounting losses incurred by the Bangladesh Jute Mills Corporation (BJMC) and said workers of the mills would receive 100% compensation. The decision on the remaining mill was not taken as it has been facing a lawsuit.

On December 2, the government shut down production in six state-owned jute mills until such time as the mills were modernized.