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CACP suggests Maharashtra govt to help cotton growers
26 Dec '11
3 min read
The Commission for Agricultural Costs and Prices (CACP), the body that recommends the minimum support prices (MSP) for various agricultural commodities, including cotton, has suggested that the Maharashtra State government should announce some relief package for cotton growers in the State on its own, with some help from the Centre.
The suggestion has come in response to reports about the farmers in the State asking for an increase in the MSP of cotton.
Currently, the MSP for long staple variety of cotton has been fixed by the Centre at Rs. 3,300 a quintal, while the cotton prices in Maharashtra and adjoining Gujarat are around Rs. 4,000 a quintal.
Cotton prices have dropped from a record high of Rs. 7,000 a quintal in March this year owing to a drop in demand from both domestic and export markets.
Another reason for the drop in prices is the estimated harvest of 35.6 million bales (1 bale = 170 kg) of cotton during the current season that began in October, higher than the 32.5 million bales produced last year.
Comparing the situation of Maharashtra cotton growers with those of Gujarat, Dr. Ashok Gulati, Chairman CACP, told fibre2fashion, “The biggest problem with Maharashtra is that the irrigation level in cotton is pitiably low to the extent of less than 5 percent. Their productivity is half of Gujarat. On the other hand, Gujarat has 50 percent of area under cotton under irrigation and productivity is double of Maharashtra. Therefore, cotton cultivators in Gujarat make profits at the same MSP whereas Maharashtra farmers make very little profit or even loss.”
Explaining the compulsions of CACP, he says, “It is true that a cotton grower in Maharashtra may earn less compared to a farmer in Gujarat, but we cannot take care of each and every farmer while deciding on the MSP. In fact, we take an average considering the country as a whole and not Maharashtra alone.”
However, he argues, “Maharashtra's sustainable solution lies more in terms of investing on irrigation. Gujarat has done it within a very short span without any major and medium irrigation projects. They created water-sheds and water harvesting structures. The erection of 120,000 water harvesting structures in Saurashtra region has changed the face of Saurashtra. Even, Maharashtra can enumerate the same example.”
“But, that can take time. So, at this stage we have suggested that Maharashtra government on its own, with some help from the Centre, should announce some relief package for cotton cultivators,” he adds.
Giving reasons for not increasing the MSP for cotton, the CACP Chairman says, “For example, if we increase the MSP to Rs. 6,000, all the exports will stop. Secondly, the Cotton Corporation of Indian (CCI) will be accumulating all the stocks that cannot be disposed off. And then, if the textile industry has to buy at Rs. 6,000, the entire textile industry will start collapsing leading to unemployment. Thus, increasing MSP will have huge ramifications on the entire textile value chain. Hence, we have to attack the root cause for farmers not making profits, rather than increasing the MSP.”
Meanwhile, Maharashtra Chief Minister Prithviraj Chavan said his government has already decided to provide financial assistance per hectare of land to cotton farmers. The announcement regarding the quantum of relief would be made after the elections to local bodies get over, he added.
The suggestion has come in response to reports about the farmers in the State asking for an increase in the MSP of cotton.
Currently, the MSP for long staple variety of cotton has been fixed by the Centre at Rs. 3,300 a quintal, while the cotton prices in Maharashtra and adjoining Gujarat are around Rs. 4,000 a quintal.
Cotton prices have dropped from a record high of Rs. 7,000 a quintal in March this year owing to a drop in demand from both domestic and export markets.
Another reason for the drop in prices is the estimated harvest of 35.6 million bales (1 bale = 170 kg) of cotton during the current season that began in October, higher than the 32.5 million bales produced last year.
Comparing the situation of Maharashtra cotton growers with those of Gujarat, Dr. Ashok Gulati, Chairman CACP, told fibre2fashion, “The biggest problem with Maharashtra is that the irrigation level in cotton is pitiably low to the extent of less than 5 percent. Their productivity is half of Gujarat. On the other hand, Gujarat has 50 percent of area under cotton under irrigation and productivity is double of Maharashtra. Therefore, cotton cultivators in Gujarat make profits at the same MSP whereas Maharashtra farmers make very little profit or even loss.”
Explaining the compulsions of CACP, he says, “It is true that a cotton grower in Maharashtra may earn less compared to a farmer in Gujarat, but we cannot take care of each and every farmer while deciding on the MSP. In fact, we take an average considering the country as a whole and not Maharashtra alone.”
However, he argues, “Maharashtra's sustainable solution lies more in terms of investing on irrigation. Gujarat has done it within a very short span without any major and medium irrigation projects. They created water-sheds and water harvesting structures. The erection of 120,000 water harvesting structures in Saurashtra region has changed the face of Saurashtra. Even, Maharashtra can enumerate the same example.”
“But, that can take time. So, at this stage we have suggested that Maharashtra government on its own, with some help from the Centre, should announce some relief package for cotton cultivators,” he adds.
Giving reasons for not increasing the MSP for cotton, the CACP Chairman says, “For example, if we increase the MSP to Rs. 6,000, all the exports will stop. Secondly, the Cotton Corporation of Indian (CCI) will be accumulating all the stocks that cannot be disposed off. And then, if the textile industry has to buy at Rs. 6,000, the entire textile industry will start collapsing leading to unemployment. Thus, increasing MSP will have huge ramifications on the entire textile value chain. Hence, we have to attack the root cause for farmers not making profits, rather than increasing the MSP.”
Meanwhile, Maharashtra Chief Minister Prithviraj Chavan said his government has already decided to provide financial assistance per hectare of land to cotton farmers. The announcement regarding the quantum of relief would be made after the elections to local bodies get over, he added.
Fibre2fashion News Desk - India
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