CHAP T E R - 4

JUTE CULTIVATION IN NORTH BENGAL

I. Introduction

As early as 800 B.C., jute was grown as a medicinal

plant and was used as a vegatable. In recant times, it is
grown on the Indo-Pak Sub-continent in West Bengal,
Assam, Bihar, O~issa, Uttar Pradesh, Tr ipura as welltMin
Bangla Desh (erstwhile East Pakistan). 6f 40 speci~s of
jute, only two varieties, the "White" and the "Tossa" jute,
are of commercial importance. The . ;rna in reasons for the
cultivation of jute in these areas are favourable soil and
weather. conditions, availability Of labour, irrigation and
retting facilities, humid climate with rainfall varying
between 50" and 70" between March and October with a
temperature of 83° F. India and Bangla-Desh are the main
producers of jute, sharing between them 73 percent of the
world output. Their individual share in the world
production of jute in the 1958-59 was 33 percent and 40
percent respectively.

·After the partition of India, as the lion's share of

the sub-continent's jute growing areas went t9 .Pakistan, a
boost in raw jute production was the most vital imperative
for meeting the fibre requirements of jute mills in India.
Consequently the output of the fibre did witness a sharp
rise in the immediate post-partition years. As a short
term: measure, tne G6vt. of India encouraged a shift in
acreage from 'ails' (autumn) pdddy to jute;
deciding that shortfall in respect of the availability of
the former would be met· by allocation of grains to the
jute-growing states. Further, stress was laid on the
r~ising of mesta. This, alongside a bUoyant global demand,
 :: 100 ..

led to a quick rise in area under jute - about

three-fold in West Bengal an'd about two-fold in
Bihar and Assam - over 1947 to 1956. Ever since,
the Govt. has tried to expand jute acreage without
~?r\
reducing the area under 'aus' paddy, the~being to
encourage the culture of jute in mono-cropped land
under 'aman' (winter) paddy prior to the sowing of
the later. In 1984-8f" product ion amounted to 5. 97
mill ion bales of jute and 1. 3 7 mi 11 ion bales of
mesta accounting for about four percent of the
country's total acreage devoted to jute and paddy.

Jute production was characterised by signi-

ficant year-to-year variatiqns. For the country as
a whole and over the period 1968-69 to 1984-85
(i.e. the period following the ushering in of the
so-called technological revolution in Indian
agriculture), the trends in jute production and
acreage are not statistically significant. For
West Bengal, however, there was an uptrend in
production, acreage, and yield of jute. The
positive growth rates in the case oE Mes~ Bengal
were offset by insignifi~ant or even negative
trend rates of jute production, acreage, and yield
reported in the other jute-growing states of
Bihar, Orissa, Assam and Uttar Pradesh. It is
worth noting though, that in the
jute-growing districts of Jalpaiguri,
 { 101 )

CoochBehar, and Darjeeling in northern Bengal Jute production,

acreage and yield showed no trend. In southern Bengal, only

the districts of 24 Parganas, Nadia, f'lidnapore and Burdwan

showed positive growth rat'es in regard to production, acreage,

as well as yield of jute. Altogether, jute production, area and

productivity in the country were marked by a striking sluggishness

during the period under review, and with stagnant teahniques

and the scarcity of good land, the yield response to acreage nou

tends to be negative - reflecting decreasing returns - in most

jute tracts of the country. In 1984 - 85 the co~bined output of

jute and mesta at 7.34 million bales fell substantially short

of the Sixth Plan target of nine million bales.

Reliable annual estimates of variety- wise and grade-

uiee output of jute in India are not available. The report on

raw jute prepared by the Technical Committee {1981) of the Jute

f'lanufacturers Development Council '{Jf'IDC) brought out that the

average yearly output {excluding masts) over the last five years

of the decade of the 1970s was 5.5 million bales of uhite jute

(capsularies) and tosea (olitorius) varieties,of which the former

accounted roughly for 1.65 million bales and the latter for 3.85

million bales, that is in the proportion of 30 : 70. It was also

shown that over the period the production of Wf 5 and TO/ 5 varieties
of jute was the highest among all grades {about 36 percent of the
total). The superior grades {grade 4 and above) formed about 40

percent of the total output with grades 1 and 2 accounting for

only about 3 percent of the total.

 ·c

( 102 )

II. The Production System of Jute ~ features and forces :

Jute is a commercial crop and about 95 percent of its output

may be regarded as marketable surplus, the balance being

retained as seed and for village - level consumption. Jute

is also predominantly a crop of small farmers and tenant

cultivators. Data regarding the size - diatrioution of jute

holdings are scanty, but it is generally estimated that about
three- fourths of the area under the crop is covered by holdings
beloiJ t1.1o hectares. A study conducted by the Department of

Economics of Calcutta University covering a sample of 891 jute

gro1.1ers in West Bengal brought out that in 1975-76 about 80

p ercsnt of jute farmers raised the crop on land ext ending from

less than a biga (0.133 hectare) to 5.99 bighas (0.801 hectare).

The corresponding figure for the previous year 1.1a s 72 percent.
The average size of jute holding in 1975-76 and 1974-75 1.1as

respectively 4.2 bighas (0.562 hectare) and 5 bighas (0.669

hectare). The agricultural Census {1976-77) data on West Bengal
. also brought out t~a unimodal structure of jute (and mesta)
~Ri~aaalxas~~st~~axaf farming in the state, revealing that in
that year 58.5 percent of the jute acreage 1.1as accounted for by

farms upto t1.1o hectares in size, and 78.8 percent of the acreage
by farms upto three hectares. Irrigated jute areQ,formed only
about 10 percent of the total area under jute.

Accordingly, the produ::tion of jute is crippled by the

typical hazards and constraints of small - scale farming in a
quasi-feudal rural ·economy that t huart g;ro1.1th. Some instability
 ( 103 )

i~ doubtless_ the result of the stochastic element of

weather variations - a very large proportion of the jute
tract in the country being rain-fed, remains vulnerable
to uncertain weather conditions.

,_
III. Constraints of the Production system
The factors that prevented jute growers from exploiting the
yield potential· of their farms and of the improved jute
varieties may be categorised along conventional lines into
two groups : (i) technologi=al, (ii) structural or institutional
(socio - economic), and as is well kno~n, these are not mutually
exclusive, there are arganic interactions between them.

The technological factors relate to {a) genetic

potenti~l and charactaristi=s on one hand and {b) cultural
practices on the other. As regards the former, the availability
of improved or hybrid seed is stated to be an important limiting
factor in increasing yields of jute. \Jhereas the availability
of certified seeds of recommended improved varieties of jute
is generally inadequate, .that of capsularies is par.ticularly
meagre- only about five percent of the total requirement. This
is because capsularies are shy-yielders, with high unit costs
of production, and the seed producing agencies are reluctant
to take up their production. Secondly, genetic improvements in
regard to jute have not yet resulted in varieties which may
cause jute to displace significantly other crops on rainfed or
 { 104 )

irrigated land. That is to say, the potential of genetic

improvements and superior cultural practices are less fully

exploited for jute than for the basic foodgrains - wheat and

rica, and some major progress -is yet to be achieved. ~oreover,

several genetic advan~es secured or for~shadowed in the

laboratories have not yet been transmitted to the jute growers.

Yield gap analyses reveal that multiples of existing representa-

tive yields are realisable, though to·a lesser extent than when

comparing high-yielding varieties with the traditional ones in

the case of foodgrains. Tests under controlled conditions have

shown that yields could be raised to even 35 quintals per hectare,

whereas under actual field ~onditions the normal yields are

considerably less. Also, the range of variation in yield is

pronounced under varying agro-climatic environment. Existing

improved and hybrid varieties of jute tend to have much higher

prcidllction costs, but higher net returns as ~o~all. The :greater

production costs of the select varieties however make them suitable

for farmers who are financially capable of assuming greater risks,
or for intensive cultivation on smaller plots.

As regards cultural practices, a chief difficulty

concerns ratting which exerts a potent influence on quality.

The potential of communal ratting fa~ilities, and of mechanical

and microbiological ratting techniques is almost totally unrealised.

Jute areas having line sawing are also very limited, and there is

scarcely any use· of seed drills of even the hand-pushed, single-

 \ 105 )

ro1.1 types. Jute and mesta gro1.1ers still saw by adopting

the age-old broadcasting method, despite the acknaiJled'JBd ·
gains from line sowing. The recommended doses of· fertilisers ar.

are nat applied in most areas, in~luding the IJDP areas, except

in some of the olitorius tracts of southern Bengal. And some

jute fa~mers are nat inclined to use fertilisers in low-lying

tra~ts owing to the risk of inundation. There is evidence that

jute growers have in many areas transferred their subsidised

fertiliser supplies to paddy or other crops. Plant protection

a~ainst pests and weeds is also unsatisfa~tory.

Institutional impediments: Credit- Although the

importance of oredit has been somewhat overrated by many (such

as the R3I 1 s 1981 ~orking Group on Institutional Credit for Jute

growers), given the facts that credit requirements for jute by

virtue of the high costs of jute growing are relatively high
per hectare and the most common immediate source of it is

indigenous, there does arise a dearth of resources which haraseee

the small juts grouers exact! y when they need them. The major

jute - growing states are in the eastern region where the scale

of institutional finance in the agricultural sector is well below

the a vera ge for the country. And the 1 dadan 1 ( t isd ad vancee)

system, deeply entrenched in undeveloped semi- feudal agriculture,

has subjugated a vast section of impoverished jute growers as

well. Jute being a commercial crop, growers (including share-

 ( 106 )

croppers) can command some credit in.the informal market

comprising landlordsjtraders;money lenders against the

security of their crop. The low {and even Zero) rate of

interest aften charged by the lenders conceal to a considerable

extent charges in the form of low prices for produce forcibly

sold in repayment- indeed a striking feature of the •d~dan•

system is that it i~ garbed in a form that avoids the emergence

of any interest - and much of the pric'es received by the jute

growers, therefore represent· a high, implicit rate of intE:~rest.

An intsgration of producti~n, credit and marketing has been

conspicuously lacking in the case of jute because of a languishing;

co-operative movement, while JCI•s involvement in production

has until very recently been minimal.

IV. Nature of production of Jut·e

production of jute is characterised by extreme

instability in production. The picture is no different in

North 3engal. This will be revealed from the following tables • .
Table - 4 1 1
District-wise area of cultivation of Jute
~ In thousand hectares)

1950-51 60-61 65-66 70-71 75-76 89-90

Jalpaiguri 13.9 35.5 45.4 42.1 29.2 35.?

oar jeeling 1.2 2.4 4.3 3.3 2.0 s.o
f¥lalda 20.8 20.6 18.1 23.4 18~0 18.1

w.oinajpur 18.2 44.8 61.0 61.4 49.,7 33.9

CoochBihar 23.7 40.6 54.7 56.5 42.3 59.6

 Table - 4,2
Oistrictwise Production of Jute
In t h o us a nd ba 1 s s o f 18 0 Kg e ea c h)
1950-51 60-61 65-66 ' 70-71 ~6 89-90
Ja1paiguri 90,1 263,1 289,4 270,7 218 .o 318,4

Dar jeeling 9,1 19,5 36,9 18,3 12,4 42,4

Plalda 103,8 119,2 51,9 120 .o 107,7 163,6

W,Dinajpur 90,7 254,0 306,8 310,7 286,8 276,5 -._.

0

-
-..,]

~oochBihar 176,9 253,0 299,8 358,8 281,9 498,2

 { lOB )

The fluctuations in productioi is partly explained~by fluctuations

in pries, which is reflected in the following table, i,e, Table 4,3.

The reasons behind fluctuatioris in price of ~aw jute are analysed in

Chapter - 5,

Table- 4,3
pietrictwise harvest pries of Jute

(Rs, per maund for 1955-56 & Rs, per

quintal for other years)

1955-56 60-61 65-66 75-76 88-89

Jalpaiguri 21,50 91.79 105,00 130 .so 386,56

oar jeeling 113,00 NT

P!alda 104,00 146,30 - 370,15

lJ ,Dinajpur 24,00 99,16 109,00 135,92 373,15

CoochBehar 22,00 100,00 135,34 .361,24

NT - No transaction,

( source, Table- 4,1, 4,2,4,3 : (i) statistical Abstract, West

Bengal, 1962, 1976-77, and 1978 to 1989 (combined), Published by
9ureau of Applied Economics & Statistics, Govt, of West Bengal}

lii) Annual Summary of Jute & Gunny Statistics, 1992-93, IJMA)

 { 109 )

Data in reepect of area, production and prices

for the entire period is shown in Appendix A. x~a

The production of raw jute is closely correlated with the

price of raw jute. The year in which the price of fibre rules
high, more jute is sown during the following year. "the year in
which the price falls to low levels, the jute sowing area of
the following year shows a marked reduction. If, however, the
price line is held at a reasonable level to cover the.cost of
cultivation plus some margin, the fluctuation in production
can be adequately controlled. However, the jute farmers have
reconciled themselves to the seasonal, annual and regional
fluctuation in raw jute prices in view of the failurs of all
attempts to stabilize area and production and to regulate the
raw jute market. Other contributing factors to this failure
are a defect! ve marketing system, transport difficulty and
speculative activities, the laet of which is responsible for
coerllive slumps in price. In some years a sharp fall in area of
-tf'cultivation or production of jute ie observed. A possible
vrv
explanation of thie phenomena is flood eituationJ.A. North Bengal.

The constraint on jute prioee deriving fro~ the

Mial viability of the jute industry calls for an improvement
in the yield and quality of the fibre so that cultivation of
jute be remunerative to the farmers. If the unit yield of jute
is lou, it ie difficult for the growers to make reasonable
profit by producing the fibres and eupplying the industry at
prices which would enable it to compete in world markets.
 Both in the Research stations and in the growers
-fields it has been abundantly proved that the present low
yield rate can be improved by input application. Inability
·of the growers to invest in inputs, as r..~ell as non-availa-
bility of the inputs in time and at convenient points has
adversely affected tho output. If credit facility is made
available and the supply line of inputs is improved, the
yield rate is bound to improve.

Fertilisers and improved seed are the most

important inputs which need to be provided to increase
the yield rat e.

Improvement of ratting facilities and training

in proper ratting procedures are the most important aspects
for improving the quality of fibre. Some attempts have been
made to train the cultivators but as the ratting facility
has not been imp·rovad the attempts have been more or less
futile. Besides good ratting facility, for better quality
of fibre little more care and attention of the farmer is ·.·;
necessary. The additional expenditure for the same is
however negligible except on concrete slabs or bamboo poles
to weigh dor..~n the charge for steeping which, in most cases
is nor.~ done by chunks of mud which makes the fibre dirty in
colour.

some of the disadvantages faced by the grouers in

respect of marketing are -
1. Arbitrary deductions and allowances.
 { 111 )

2. ~onopsonistic buyer - ultimately the jute mills,

for almost all jute.
3. Lack of transport, storage and grading facilities.

4. Indebtedness.
5. Imperfect knowledge of miu·ket conditions.
6. Tie up between traders and jute mills.

It appears that a large number of arbitrary deductions

and alloYances both in cash and kind exist in the jute trade
and are borne by the sellers. Their incidence is passed on
to the cultivators.

While there are large numoer of growers {nona

of Yhom can individually influence price), "there is
finally one group, representing practically all ultimate

buyers.- the IJMA -which wields a considerable influence

on the jute market.

It is generally recognised that the farmers' share

in the ultimate consumer price. tends to increase if tho
p_roduca is sold after grading at the farm level. The Indian
standards Institution, with the help of the Directorate of
Jute Development, industry, trade and gro~.o~ers as well as
research institutions has evolved an eight grade system.
This ~.o~ill have little impact unless the gowers are themselves
trained in the grading of their fibre. The Directorate of
Jute Development is at present arranging training in jute
grading.
 { 112 )

The weak financial position of the growers is

sometimes exploited by the ' beparis, and t farias ' who advance

them loans under the 'dadan• system making it often obli-

g~tory for them to dispose of the bulk of the fibre to the

creditor - dealers locally, at a price which may well be
below the market rate.

Yhile it is difficult to substantiate by statistical

evidence, the existence of a tie- up between jute trading
interests and jute goods manufactur~, it is understood that
a number of influential mill owners also have a big share in

the raw jute trade. At one end of the chain, the growers are
deprived of a remunerative price, at the other end ultimate

end users may have to pay a high price. Problems of marketing,

however, are discussed separately in Chapter 5.

The aforesaid imperfections have to be taken care of.

But above all, the fate of the cultivators are linked with
the jute industry. Indian jute industry has ceased to be
an export - oriented industry. Exports of jute goods have
been declining rather sharply sines mid-seventies, from 5.83

lakh tonnes in 1974 -75 to 3.17 lakh tonnes in 1978- 79.

IJhile foreign demand for Indian jute goods has declined, The
'

domestic demand has continued to be brisk. The internal

consumption of jute goods went up from 5.4 lakh tonnes in
1974- 75 to 9.9 lakh tonnes in 1982-83, mainly as a result
of increased demand from agricultur3l sectors, and au gar, cement
i
and fertiliser industries. (Report of the Agricultural prices I
I
.I

!
I
I
 { 113 )

commission for the season 1984-85). The nature of the

crisis in jute industry and reasons behind it have been

discussed in detail in chapter 3.

It is likely that in the coming years the demand for

raw jute wUl increase at a faster rate than in the past. It
is mainly because earlier the increase in domestic consumption
jute goods was being counter balanced by decline in exports.
In future it is possible that exports will stabilise at the
existing level and domestic requirements of raw jute will
incrsa se. As a result ZBijrd~J:scasAk.s d emend for raw jut e. is

surely to go up •

( V). §_.~.Jrvey on Jute cultivation :

I have undertaken a survey on jute cultivation

in two villages of CoochBehar district. The questionnaire

of the survey is shown in .~ppendix 'B 1 • The name of the
Villages are kawardera and Sara Kaimari, both in the Matha-
bhanga Sub-division. The survey was undertaken in the jute
year 1990-1991 (July to June). In choosing respondents random
sampling method was adopted. A number of 50 jute growers were
selected in each of the two Villages.

Ka~o~ardera is a Village having population of

3,500. ~ain occupation of the villagers ~re cultivation,
business and service. The distance of the nearest town
~athabhanga from this village is 5 kms and that of the nearest
 \ ..... ' --1

market centre Golakganj is 1 Km. There is a branch of

Bank of Baroda in the village, Bus communication ~ith

nearest toun twlathabhanga has improved. But electricication

has not extended to entire village.

Jute cultivation in this village is Charac-

terised by small scale fca.rming. Area under jute cultivation
of a particular cultivator varies from l bigha to 8 bighas.

There are t~o varieties of jute, viz, ~hits and tosea. Normally
area under tossa variety is higher than that of ~hits jute.
Only in a fe1.1 cases ~hits jute is cultivated in a greater
proportion as it requires comparatively less uater.

Cultivators face some problems in undertaking

juts cultivation. Natural calamities affect cultivation. Notth
Bengal is a flood-prone area. In years of excess rain, ueeding
becomes difficult as ~ater remains stored in the farms. In
years of scarce rain, farmers face problem regarding ratting.
Thie is so as ratting tanks become dry. They have to carry
jute plants to distant places ~here deep tanks have some ~ater.

Lack of finance mak'es it difficult collection of materials for

cultivation such as fertiliser.

Jute cultivation is not much remunerative as

margin of revsnua over cost of cultivation is insignificant.
It is b~ignificant in consideration of length of the season
of crop and area of jute cultivation. On an average this margin
uas ~. 350.00 per bigha. Cultivators carry on jute cultivation
uhether the prices are remunerative or not due to inertia, lag
and absence of any other alternative. \Je rarely find a cat~gal

relationship betueen costs of production and prices. Thi~ lack

of correspondence bet~o~een agricultural prices and costs has

 ( ll5 )

been particularly conspicuons in countries like India as

~ell as in the rsgion of North Bengal ~here, for majority
of farmers, agriculture has been more a tradition and mode
of living rather than an economic pursuit.

It is also pertinent to note that soma jute

gro~ers prefer to raise the crop out of tradition rather
than fully switching to paddy in response to relative changes
in prices or profitabilitY. This is done as well for immunity I
I
I.

against floods that are comr.~on to several jute-growing tracts.

If only aua paddy is cultivated, it is liable to be severely

damaged by floods which do not affect the jute crop as much,

in sofar as the latter generally is quite tall by the time
floods occur in such regions. ~oraover, in poor soil areas the
gro~a~ing of jute may increase soil fertility ~a~hi~h also spurs

its culture in preference to pure aus - aman combination.

These considerations. lie behind the continued cultivation of
some jute, particularly by risk- averJQ• gro~o~ers, even in
the wake of low prices of the cqmmodity.

~oat of the growers of the village do not take

any loan For jute cultivation. The reason is uncertainty in
production due to natural cal~mities and fluctuations in
monsoon. In some cases farmers are influen~ed by previous year• s
jute price in determining acreage of jute cultivation. Acreage
increases if previous year's price is high and it declines if
previous years price is low. 9ut generally jute is cultivated

on traditional basis$ Climate and finance are other determining

 ( 116 )

factors. In the absenc:a of timely rain acreage d.sclines.

In years of financial hardship acreage declines.

Women members of the family take part in cultivation.

They undertake weeding, separating the fibre and drying. In

some cases, women do not take part in any stage of cultivation.

Local jute market is dominated by private merchants

as role of JCI is insignificant. so price falls after harvesting

and price is not much remunerative. farmers prefer to sell to

merchants as JCI do not come to market in proper time. Ploreovar

JCI do :-~ot make payment readily in cash, whereas growers are in

need of ready money to meet their daily expenses.

The residents of the villa~e are mainly divtded into

two ejth~ic groups - one .is'rajbansi' who are original inhabitant
of the village. The other group is non-raj-bansi who hqve migrated
from Bangladesh before or immediately after independence. Most of

the growers being small farmers, they are compelled to undertake

distressed sale a sm:::~ll part of their production.

The name of the other village surveyed is Sara Kaimari.

It is a village having population of 2,500. Plain occupation of

the villagers are cultivation and business. The distance of the
village from the nearest town Mathat:Jhanga is 10 Kms and that from
the nearest market is 1 Km. There is a branch of the Central Bank
of India in this village. It may bs mentioned that Central Bank of
India is the lead bank of this region. 9us communication with
 { 117 )

nearest town Plathabhanga has improved. But electrification

has not extended to entire villa~e.

The nature of production system and the problems

faced by the juts growers of this village are almost similar

to that of the village mentioned earlier. Jute is cultivated

traditionally. Previous year• s price affect acreage of jute

cultivation marginallY. In this connection mention may be

made of a study by Kanailal Basak and Kamal Kr Dutta regarding

some factors influencing jute acreage. The subject of Indian
Farmers• responsivencess to economic opportunities has gained

importance in the literature during the past few decades. The

existing studies lDharam Narain, N C A E R, Rabbani and Ahmed)
indicate the economi::: rationality of farmer a in general. In

particular, they su•;:Jgest that farmers make appropriate adjustments

in a cr ea gee under crop a in response to changes in prices. The
b,._oo...l.
~Qad conclusion to emerge from those studies on jute growers
is that they very their area under jute when jute-paddy {aue)

price ratio changes, though the elasticities of response, both

short run and long run are not large. But the study of Kanailal

Basak and Kamal Kr. Dutta holds an altogether different view

contrary to the traditional belief of responsiveness of· the

farmers to changes in prices. An attempt is made by them to

find out the determinants of jute cultivation in different parts
of West Bengal.

The ~tudy reveals that the jute growers are not

responsive to changes in relative jute prices, i.e. changes in
 l 118 )

jute prices relative to paddy (aus) prices do not appear

to have had any significant impact on the groYers aecision -I
i
to grow jute. This may partly reflect the importance of non-
pries elements Yhich give rise to forme of tied agreements
arising out of systems of financial advance.

Allo~ation of area under a crop having competing

crops is expected to be influenced by changes in relative
prices, because these crops can be sown directly on the same
land and thus could compete for area. But Basak and Dutta find
a weak and insignificant correlation between the percentage
change in relative jute prices and the percsntage change in
the proportion of land devoted to jute cultivation for each
district. So the importance of non-price elements.

This leads them to have a fresh look on the nature

of transactions in the informal credit market with particular
focus on the terms and contracts of different transactions
and the sources of credit. There are three types of loan trans-
actions prevailing in the districts of West 9engal -
(a) Loans given and recouped in money terms
(b) Loans given in money and recouped in crop
{c) Loans given in kind (inputs) and re=ouped in crop.

Differences in the sources of credit to the jute

grouers have given birth to differences in financial and·
·marketing arrangements in the southern and northern parts of
 ( 119 )

West Bengal. This gets reflected in forward financing by

the jute traders in South Bengal, while it is absent in

North Ben gal. sale of jute, however, invol vas traders,

though they are not interested in financing in North Bengal.

Because of the relative absence of irrigation facilities in

North Bengal in particular and other infrastructural facilities

associated with production, there exists a mono-cropped situation.

farmers practice traditional cultivation and depend mostly on

their •ownadM inputs, not purchasing from the market. This means

that they require less financs. On the other hand, this results

in low productivity. Hence the lower volume of transaction

discoura:,Jes the traders to finance the growers.

The farmers are insensitive to price stimuli. 8asak

and Dutta concludes that this does not nacessaril y mean that

the farmers are not responsive to economic incentives and oppor-

tunities. It is the financial- cum- marketing system that
preve~ted the primary producers from benefiting from price fluctu-

ations. This is so because the jute merchants and the village

mahajans controlled the sources of credit. These producers,as
they were indebted to traders and mahajans had little effective

control over the decision making process in agricultural production.

The conclusions of Basak and Datta, howaver, do not

have full support in the findings of my survey. Most of the
farmers do not take any loan for jute cultivation and use their

•owned' inputs. 3ut it is not true that they can not determine

the acreage of jute independently.

 120
I
. I
I
!

Apart from mentioning the problems of jute

cultivation in particular, the jute grmvers of the
villages also expressed their sentiment against the
salaried people of towns from the point of difference of
financial status. So, unless economic backwardness of the
cultivators is taken care of on an emergency basis,
social tension is surely to aggarvate in near future.

VI. A Short - Run Supply Response Model of Jute

We can frame a short-run supply response

model of jute based on data of product ion of raw jute,
area of cultivation of raw jute, harvest price of jute
and cost of cultivation of jute. Data of production and
area of cultivation have been collected from Annual
Summary of Jute and gunny statistics, 1992-93 publishe~d
by IJMA which have been verified from the data published
in statistical Abstract, West Bengal, 1978 to 1979
(Combined), published by Bureau of Applied Economics and
statistics, Govt. of West Bengal. Data of harvest prices
have been collected from statistical Abstract, West
Bengal. Data on cost of cuLtivation have been collected
from different issues of "Study on Farm Management and
Cost of Production of Crops in West Bengal" published by
Directorate of Agriculture, Govt. of West Bengal.

In the standard supply response models

desired output is related to some index of expected
profitability usually the unit price - average cost
ratio.

y Production
Yield rate ==
Area
 121

Desired yield Y*t •••• ( 1)

P = Price, C = Cost

p e
(C)t_,: expected profitability in t computed
on the bas is of information
available in (t - 1).

Expectations are formed according to Narlovian

"Adaptive Expectations" (revision of expectations is
proportional to error).

(f)e = (f)e
c t-1 c t-,_+ 12.[
t-'
(p)
c t.-1
•
-
(p)e.
c t·-.t

0 ~~ ~ 1

Actual profitablity

as ,._
R
~'-'
7\
t- I
+ I"'R ( J - p) A t - ,t +{3 {t- f3) 7\-t - 3

f - - .... - . -( l)
[ 7l = ~ J
Yt
~
The desired yield rate is related to
actual/observed rate through the mechanism of "Partial
Adjustment".
::: o(.. ( yt* . .. ( 3)
Yt - Yt.-t

rfv Co-efficient of adjustment

 122 ..
..

For· statistical exercise we write

y* -- a.o + a., e
t 7'\t.-1 + Ut
Ut: error term

and simplify (2) by ignoring the higher orderfl terms

7\ t , At-4
-3 I since {3 is a
fraction these terms have progressively decreasing
weights in 7\e
t -1 ~o, 7i~-~- P"t-1 +~(I-P)A"t-~
Sustituting in (3) and rearranging

--.
This equation (J) is the reduced form expression for our
simplified yield-response model for jute. We note that
from the estimates of the parameters of (J), the
estimates for the original structural form parameters (),{), CL 1 ,
~, ~ can ·be recovered, so that there is no identification
Problem.

We can also write the equation (J) as follows

for convenience of calculation of the parameters :

As a representative case, the supply response

model is farmed for Jalpiguri district alone.

Production
we kno~, Y = yield
Area
 ..
.. 123

The model is framed by taking the data for the period

from 1980-81 to 1989-90. The data is represented below :-

Year Product ion· Area Price Cost Yield Price/Cost

(b 'oop bMq) ( '£~ao bu.) C.~/ca,t~
r CK~Le&ttl
1

1980-81 388 56 167 46 6.93 3.63

1981-82 315 44 172 39 7.16 4.41 I
I~
1982-83 327 44 207 52 7.43 3.98
1983-84 301 43 298 65 7.00 4.58
1984-85 293 47 752 86 6.23 8.74
1985-86 507 70 185 65 7.24 2.85
1986-87 311 50 205 53 6.22 3.87
1987-88 357 44 276 60 8.11 4.60
1988-89 395 45 387 85 8.78 4.55
1989-90 318 36 302 106 8.83 2.85

DATA-FOR REGRESSION

Year Yt (p/c)t-1 (p/c)t-2 Yt-1

1982-83 7.43 4.41 3.63 7.16
1983-84 7.00 3.98 4.41 7.43
1984-85 6.23 4.58 . 3.98 7.00
1985-86 7.24 8.74 4~58 6.23
1986-87 6.22 2.85 8.74 7.24
1987-88 8.11 3.87 2.85 6.22
1988-89 8.78 4.60 3.87 8.11
1989-90 8.83 4.55 4.60 8.78

Solving the regreesion equation by ordinary least squares

method, we get

Yt = 3"3,t + ·og1 if t-t- · 3o'1 f\t-2.

+- . 11 ~ yt -I -1- • g g 6
 . . 124 ..

I~ may be mentioned, one limitation of the

model is that time span of time series data is small.
Although data for· area, production and prices are
available for greater number of years, unfortunately
Directorate of Agriculture, Govt. of West Bengal could
not supply data of cost of cultivation for more than 10
years. This is because they can supply only published
data as per government specification.

REFERENCES :

1. Marketing of Jute in West Bengal, A Sengupta

in Arthaniti (1975 and ~976).

2. Some factors influencing Jute Acreage in

West Bengal : Role of Jute Prices and the
~credit Market, Kanailal Basak and Kamal Kr.

Datta in Indian Journal of Agricultural

Economics, October - December'1984.

3. Statistical Abstract, West Bengal, 1962,

1976-77 and 1978 to 1989 (combined),
published by Bureau of Applied
Economics and statistics,
Govt of West Bengal.
 .... 125

4) Jute in India, Goutam K. Sarkar (1989),

Oxford University Press, Calcutta

i.
I

5) Report of Agricultural Prices Commission

on Price Policy for Jute for the season
1984-85.

6) The Dynamics of Supply : Estimation of

Farmers• Response to Price,Nerlove (1958),
The Johns Hopkins Press, Baltimore.