Cabinet announces 6% hike in jute MSP to revive production

The Union government on January 22, 2025 announced a 6 per cent increase in the Minimum Support Price (MSP) for raw jute, raising it to Rs 5,650 per quintal for the 2025-26 marketing season. This represents an increase of Rs 315 compared to the previous season’s MSP of Rs 5,335 per quintal.  

Union Minister of Commerce and Industry Piyush Goyal announced the decision, stating that the revised MSP is 66.8 per cent above the all-India weighted average cost of production. The announcement comes ahead of the jute cultivation season, which begins in March and is aimed at benefiting jute farmers and revitalising the faltering jute economy.  

India’s jute sector has been struggling due to a combination of factors, including poor market demand, limited government procurement, lack of diversification, inadequate infrastructure and the declining state of jute mills. The country’s production of raw jute has dropped by over 29 per cent in the past decade, falling from 2.03 million tonnes in 2011-12 to 1.44 million tonnes in 2024-25, according to advanced estimates released by the Union Ministry of Agriculture and Farmers Welfare in November 2024.

Addressing the media, Goyal said the decision would particularly benefit farmers and jute mill workers in West Bengal, followed by Assam and Bihar. West Bengal, India’s largest jute-producing state, accounts for 70 of the country’s 93 jute mills.

“There are 170,000 farmer households in the country that produce jute and rely on the jute economy. This decision will be beneficial for them,” said Goyal, while briefing the media on cabinet decisions. 

Responding to questions about the declining jute output, Goyal noted that production decisions ultimately rest with farmers. “Jute production is subject to a variety of conditions, and its acceptance as a sustainable product is increasing. We have consistently encouraged farmers to produce jute and assure them we will buy it at MSP. However, the output and production of jute will depend on which product gives farmers the best value,” the minister said.