No cut in MSP of cotton – Shankersinh Vaghela

23 Sep '08

2 min read

Mr Shankersinh Vaghela, Union Textile Minister ruled out any likelihood of pushing back minimum support price (MSP) for cotton.

The minister stated assertively that although MSP for cotton is quite high, the move is necessary to safeguard the interests of farmers who are on the receiving end.

Mr Vaghela further noted that to ease the industry from the impact of inflated cotton prices, the Government has provided the option of importing cheap raw cotton and to serve this purpose it has also removed import duty.

It was in July that the Government scrapped import duty on raw cotton and withdrew export incentives to boost supplies and maintain high prices.

When MSP for medium staple cotton was raised to 40 percent, the industry expressed disappointment and protested against this move but in vain. The Government stood firm in its decision on grounds that the step was necessary to cope with increased input costs.

MSP of medium staple cotton which includes the widely used Shankar variety, has been raised by 39-43 percent to Rs2,500 per 100 kilogram against last year's MSP of Rs1,750-1,800. Similarly, MSP for long staple fibre cotton has been raised to Rs3,000 per kilogram from its initial Rs2,250.

Textile minister further said that with increase in the productivity of cotton per hectare, yield is expected at over 300 lakh bales in 2009. Moreover, after a 15 percent drop in exports due to firming of Indian rupee last year, the textile industry has rebounded after tables turned with appreciation of dollar. Exports are anticipated to mount by 18 percent this year.

India exports about 24 percent of its textiles to the US market and another 18-20 percent to Europe. The Minister defied speculations that higher cotton price would lead to inflation.

However, on a positive note, Mr Vaghela noted that despite tough competition from China in textile exports, India's quality control was considered as best world-wide.

To take the industry to greater heights, he advocated undertaking production of technical textiles and a venture into organic cotton which has a huge demand in American and European markets.

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