The central bank yesterday announced a Tk 100 crore refinancing scheme to ensure fair prices for jute farmers who are walking a tightrope this season.

Banks will receive funds to extend low-cost loans to jute traders so that the growers get fair prices, Bangladesh Bank Deputy Governor SK Sur Chowdhury said at a press conference at the BB headquarters.

Chowdhury said the jute farmers will indirectly be benefitted from this. If a farmer sees there are no buyers in the market, he will be compelled to sell his produce at throwaway prices. But the fund will increase cash flow as well as the number of buyers, he added.

Private jute mill owners and jute traders will receive loans from the fund at 8-9 percent, while the present interest rate in the market is 15-16 percent.

Loans will also be disbursed with minimum required formalities; if one owns a factory or warehouse, he will be eligible for the loan, the deputy governor said.

However, the government had asked the central bank to build a fund of Tk 200 crore, Chowdhury said.

Bangladesh Jute Mills Corporation, the biggest buyer of raw jute in the public sector, is running low on cash and is struggling to buy jute from the farmers and traders in the peak season now. This has made the jute market lose competitiveness and a depressed market is forcing growers to sell jute at lower prices.

From Tk 1,400-Tk 1,500 a maund last year, farmers are getting only Tk 950-Tk 1,100 this season from the sale of raw jute, according to market sources and field reports.

The BJMC had sought Tk 500 crore from state-owned commercial banks a few months ago to cope with a cash crunch, but it received only Tk 125 crore.

FROM PAGE Bl

An official of a state bank said they could have given the Tk 500 crore to the BJMC, but for that the state-run corporation had to get a guarantee from the finance ministry, which it could not do.

At Mohimaganj jute purchase centre in Cobindaganj upazila of Gaibandha, farmers recently burnt jute to vent their frustrations over the dull market

In addition, the devaluation of the Indian currency and the political turmoil in Syria have affected jute exports to the Middle East. Local and international buyers are taking time to purchase large amounts of the natural fibre, market analysts said.