The Cotton Corporation of India (CCI) has begun its MSP operations across Andhra Pradesh, Telangana and Maharashtra. According to top CCI officials, around 4,000-5,000 quintals have been procured so far.
The agency has been facing criticism for not beginning purchase on a large scale. It is yet to commence procurement in Punjab.
CCI CMD BK Mishra said Cotton farmers are getting higher prices than the MSP in Andhra Pradesh and Telangana and therefore there is no requirement for the agency to act in a major way. Farmers in Andhra Pradesh and Telangana are getting R50-100 more than the MSP for every quintal, he said.
The Centre has announced an MSP of R4,100 per quintal for cotton with a moisture content of 8%.
There is an expected slump in cotton output by 5-10 lakh bales this year due to various reasons, including white fly attack and sparse rains. The cotton production is expected to be around 370 lakh bales this year as the overall acreage has shrunk. The prices are likely to rise as some farmers from Telangana have demanded an MSP of R5,000 per quintal.
Referring to the recent protests at some of the purchase centres by farmers, Mishra said that purchases were not made for issues related to moisture. Volatility in prices is being quoted as another of the reasons behind its reluctance to go ahead with purchase. Mishra said that some cotton is of poor quality. At the start of the season, CCI made it clear that it will purchase cotton with moisture content below 12%.
Mishra expects arrivals to pick up pace after Diwali and said that CCI is ready with its centres across the country for procurement. The agency plans to open around 330 centres across the cotton growing regions of the country. Earlier, Mishra had indicated that CCI may purchase 30-40 lakh bales depending on market conditions. In the 2014-15 season, CCI had purchased 87 lakh bales.
According to industry data, the CCI has been left with an unsold stock of approximately 12 lakh bales for which there is now a good demand because of high moisture content in the new cotton arrivals. Earlier this week, the Indian Cotton Federation said that the CCI has planned to procure cotton to support the farmers to address the price fall below MSP levels. Textile mills have been demanding the revamp of CCI for a fair cotton trade policy.
Cotton arrivals so far this season have touched 5 lakh bales against 4 lakh bales in the last season although acreage has shrunk from 126 lakh hectares in 2014-15 to 117 lakh hectares in 2015-16.
Mishra also lauded the pilot project planned by the Centre in Maharashtra to enable farmers to approach traders directly for selling their crop below the minimum support price (MSP). Subsequently, the Centre will credit the difference in the MSP and market price directly into farmers’ bank accounts.