Sustenance of Kashmir’s Wool Industry depends on adapting and adjusting its practices to the changing times

Jammu and Kashmir is the second-largest producer of wool in the country. The UT produces approximately 70 lakh kg of wool per year. Still, even with such a high production rate, the wool is not processed in the region due to the lack of proper infrastructure. On the contrary, the raw wool is transported to Punjab and Haryana for processing and subsequently, the finished products like crewel yarn, blankets, apparel, and many other items are supplied to the Valley. 

Jammu and Kashmir is one of the few places in the country that procures wool at Minimum Support Price (MSP) every year from shepherds. But the region’s inability to sell its raw woolstock in the last one-and-a-half year has had an impact on all stakeholders. In addition, the pandemic affected the markets; lowering purchase prices by the time the next purchase season began. 

The UT government plans on providing economic opportunities to nearly 50,000 families associated with sheep rearing in J&K. But this is still not enough to address the issues concerning shepherds, wool mill owners, local artisans, weavers, and workers, such as a decline in wool export, lack of wool processing facilities, no standard MSP, etc.

Wool production in Kashmir

In 1974, the wool production in the UT was 14 lakh kg, of which 1/3rd was fine quality wool from the crossbred local-imported merino sheep. The rest was short-staple wool. Almost 700,000 kg was spun and woven by more than 30,000 workers in both the public and private sectors.  

Some 400,000 kg of fine quality wool was used by the public sector and three Khadi organizations – Dastkar Anjuman, Gandhi Ashram and the Khadi and Village Industries Commission. The remaining 300,000 kg was utilized by community weavers engaged in making gabbas and namdas, traditional carpets of the erstwhile state, by using short-staple fibres. At most, 400,000 kg of wool was imported from other states of India. 

In 2018-19, the UT produced almost 72 lakh kg of wool and held a share of 18.1% in the total wool production in India. The region’s Merino wool remains a sought-after textile fibre in the country. It is one of the finest kinds of wool. It also forms the main raw material for weaving shawls and carpets. The grading of wool is based on its fitness, length, colour and feel. In J&K, the average yield of wool per sheep is about 2.28 kg. This is much higher than the national average of about 1.39 kg. 

The cost of selling this type of wool amounts to more than Rs 25 crore. However, the farmers and sheep breeders do not even earn Rs 5 crore as most of the wool gets damaged during storage. Thus, every year, the UT imports woollen and textile fabrics like tweeds, blankets, blazers made of the state raw material from Punjab and Haryana for Rs 100 crore. 

What is being, time and again, recommended is that the local government should take concrete steps to utilize the raw wool. If done effectively, the textiles could be easily manufactured in the valley and thus leading to the creation of jobs, both in the private and public sector, and turning the economy around. 

Wool industry in 2020, the year of the pandemic

The COVID-19 pandemic and subsequent lock-downs have added to the economic misery of many business sectors. The pandemic greatly affected the wool sector in other states of the country, especially in Jammu and Kashmir, where this natural textile fibre contributes greatly to the region’s economy.

Approximately 700,000 kg of raw wool has been lying with the UT government’s Wool Board since the end of 2019. The government made no new purchases during this period. Wool from the UT is usually sold to cloth manufacturing traders in Amritsar and Ludhiana. A substantial quantity of raw wool is sold to Rajasthan too. The rate of highest grade wool, which was sold at Rs 140 per kg in 2019, dropped to Rs 45 per kg in 2020. Thus, the Jammu and Kashmir Wool Board decided to hold back its stock. It has been a year since then but the rates have not improved. 

Even the best quality wool was sold at prices as low as Rs 35 per kg. To prevent incurring a loss, the board had decided not to sell it in the market. It would have been a huge loss for everyone involved in the business. As a result, the grease and shine of the unsold wool was and is still being affected and there are chances of moth infestation as well.

In March 2021, when the rates still hadn’t improved in about a year, the wool board sent recommendations to the government to dispose of the stock at whatever rates were available. The government had then asked the board to conduct an auction and call for bids but there was no response to the tender. In view of this, Lt Governor J&K ordered the Wool Board, also known as the J&K Sheep and Sheep Products Development Board, to disband.

The administrative council also directed the Industries and Commerce Department to plan a scheme that fits the marketing needs of wool growers/producers. The scheme would provide support from the government to all concerned and ensure a remunerative price for woollen products.

The waning national wool market 

The wool prices, internationally, are many times higher than domestic prices. As per IndexMundi, a data portal that compares commodity prices, the monthly wool price for September 2021 was Rs 893 per kg. 

Information from the Department of Sheep Husbandry, Kashmir correlates this discrepancy to countries mostly selling processed wool and not directly from the sheep’s skin like in many states of India, including Jammu and Kashmir. The Wool Board, J&K was not in a position to process the raw material. If the wool industry in the Valley was able to wash, then put the wool through other processes such as scouring and combing, then it could fetch a higher price. Without value addition, consumers are not ready to purchase at a higher price. The wool produced in the Valley is considered to be fine apparel wool and is rare in the country. But with the region lacking facilities for processing wool, it is becoming difficult to sustain the industry. 

The government must establish scouring and combing plants to overcome this issue as it is essentially a one-time investment. A wool processing facility could solve the woes of this declining industry in Kashmir. It is believed that the rates per kg could triple or even quadruple after processing.

Another reason for high international rates is because countries like Australia and New Zealand are bulk producers of wool. To some extent, these nations have a monopoly in the wool market. Even before the pandemic, the sector was in a bad shape because of India’s growing reliance on imported raw wool. For raw wool, a major share of demand is met by imports from all over the globe, categorically from New Zealand, Australia, Europe and Saudi Arabia.

The import duty on the fibre is just 4%. So, traders and manufacturers find the imported raw wool cheaper. The price also dropped to Rs 160 – 170 per kg from Rs 400 per kg in the last few years. Hence, most apparel manufacturers in India purchase imported processed wool rather than coarse wool from the Valley or other wool exporting states.

This is one of the major reasons the central government, under its National Livestock Mission, decided on importing high-quality breeds of sheep to increase the country’s wool production in the near future. However, how this mission would benefit the grassroots level livestock owners, shepherds, or chopans, as they are called in the Valley, remains unknown for now. Due to the lack of processing facilities for combing and scouring, the supply chain of wool shearing, processing and manufacturing remain remarkably affected in J&K. If this continues, the sheared wool would go to waste as per the current market prices. And, as a result, from the shepherds to the local retailers to the Wool Board, everyone involved is facing losses.

Recommendations

To provide a much-needed push to the growth of the wool industry in the Valley, LG, Manoj Sinha inaugurated the Showroom cum Interpretation Centre at Government Woolen Mill, Bemina, established under the World Bank-funded Jhelum Tawi Flood Recovery Project (JTRFP) in July, 2021. The project was undertaken as a sub-part of the Restoration & Strengthening of Livelihood component of the JTFRP. In Phase II, up-gradation of machinery and ancillary work was bound to be completed by August, 2021 at a cost of Rs 4 crore.

However, the wool industry is at the point where a lot of work needs to be done. 

Here are a few recommendations to consider:

1. Establishing wool processing plants, for scouring and combing, is the most efficient way to ensure everyone in the supply chain is benefited. In addition, adequate testing facilities, quality control measures, marketing services, infrastructure, and trained manpower should be looked into and secured appropriately.
2. Importing good quality sheep for wool is the way to increase production. However, care is to be taken to supply the animals to all communities involved in livestock rearing. Not just Gujjars and Bakarwals, but the local Kashmiri herders, chopans, pohuls, need to be included as part of the receiving end in the National Livestock Mission.
3. Woolgrowers should be helped in securing proper economic status while being made aware of traditional management practices.
4. Emphasis should be to increase the production, with value-added benefits, of locally cultivated wool rather than imported wool. For this to happen, the product should be appealing to apparel manufacturers. Thus, further accentuating the need to improve, yet again, the quality and type of wool manufactured. For this purpose, expansion of research and development centres should be encouraged.
5. A Minimum Support Price (MSP) should be fixed for wool growers, workers, shepherds, weavers, and middlemen involved in the wool trade to sustain their daily wages. A depository or an organized wool market should be established to support this MSP.
6. The Handloom and Handicrafts Policy that focuses on making the adequate supply of raw material, like wool yarn, preferably on Mill Gate Price, available to weavers and craftsmen, should be encouraged. Also, the availability of quality raw material through raw material banks/yarn banks for which setting up of wool mills in MSME (Micro, Small, and Medium Enterprises) sector is encouraged by this policy should be followed through. 

References:

1. https://www.greaterkashmir.com/business/kashmir-wool-industry-in-shambles
2. https://www.risingkashmir.com/JK-2nd-largest-producer-of-wool-in-country–LG-69830
3. https://www.downtoearth.org.in/news/economy/shepherds-in-distress-no-procurement-by-j-k-wool-board-since-2019-as-covid-19-mars-market-80136
4. https://www.downtoearth.org.in/news/economy/shear-desperation-how-can-india-s-wool-sector-be-revived-78546
5. https://www.jkinvestorsummit.com/pdf/Wool%20Processing%20Handlooms%20and%20Handicrafts%20Policy%202020.pdf