Indian govt revises minimum support price for cotton

Government of India has revised  Minimum Support Price (MSP) for medium staple cotton from Rs. 2800/ qtl to Rs. 3600/ qtl and for long staple cotton from Rs. 3300/ qtl to Rs. 3900/ qtl for cotton season 2012-13.

The Cotton Advisory Board has estimated cotton production in the country at 334 lac bales, consumption at 260 lac bales and an exportable surplus at 70 lac bales. Although domestic consumption is showing increasing trends, the sharp decline in global trade and increase in world stocks have imposed a downward stress on cotton prices, which is reflected in Indian cotton markets also.

Domestic prices have touched MSP levels in some places of the State of Andhra Pradesh and are close to MSP levels in Maharashtra, Punjab, Rajasthan and Madhya Pradesh.

Government has formulated a contingency plan for procurement of 90 lac bales of cotton under MSP operations in cotton season 2012-13 by operationalizing 288 procurement centers in nine cotton growing States. The Cotton Corporation of India has already raised working capital requirement upto Rs. 15000 crores for MSP operations.

The distribution of cotton procurement centers has been firmed up in consultation with State Governments. Cotton Corporation of India will operate 20 procurement centers in Punjab, 14 procurement centers in Haryana, 28 procurement centers in Rajasthan, 47 procurement centers in Gujarat, 55 procurement centers in Maharashtra, 17 procurement centers in Andhra Pradesh, 13 procurement centers in Karnataka and 7 procurement centers in Orissa.

The criteria for selection of a procurement center include expected arrivals of 50,000 quintals, existence of a functional market yard, availability of a weighbridge in the market yard, availability of ginning and pressing factories and availability of fire fighting facilities. Three procurement centres have already become operationalised in Andhra Pradesh.

A special MSP cell has been created at Cotton Corporation of India’s corporate office headed by Director Marketing Shri A. Chokalingam. Textiles Minister Shri Sharma has also directed timely settlement of payments to farmers following procurement.

Shri Sharma and Agriculture Minister Shri Sharad Pawar also met on November 1, 2012 to review the status of MSP operations and current trends in prices. It was agreed that price stabilization operations would be taken up in a coordinated and timely manner to alleviate farmer distress both by Cotton Corporation of India and NAFED in the coming months.

Shri Sharma has also appraised the Prime Minister on the situation and has proposed constitution of a Group of Ministers chaired by Finance Minister to oversee the MSP operations and the sales plan.

Ministry of Textiles