Manmohan to take up cotton MSP with Pawar today

Written by Commodities Bureau | New Delhi | Updated: Dec 10 2008, 06:02am hrs
With the cotton ginners and textile industry at loggerheads over the sharp rise in minimum support price and need to boost exports, Prime Minister Manmohan Singh, who now also holds the charge of the finance ministry is scheduled to meet agriculture minister Sharad Pawar and officials from the textiles ministry on Wednesday to sort the issue.

The meeting also assume significance as it comes close on the heels of the announcements made for the textiles sector in the fiscal stimulus package dubbed as inadequate by a section of the industry.

The government in its fiscal stimulus package had made an additional allocation of Rs 1,400 crore to clear the backlog of request under the Textiles Upgradation Fund Scheme (TUFS). It also included handcrafts under the Vishesh Krishi & Gram Udyog Yojana (VKGUY).

We have been called for a meeting tomorrow with the Prime Minister to discuss the cotton MSP issue, agriculture minister Sharad Pawar told reporters on the sidelines of an industry conference Tuesday.

Last month, more than 5,000 ginners across the country went on a two-day strike in protest against the high minimum support price and falling export market. They said that their margins have been badly hit after the government increased the minimum support price of cotton by more than 40% to Rs 575 per 20 kilogram and sharp fall in the export market due to global slowdown. Traders said exports are expected to come down to just around 150,000 bales (1 bale=170 kilogram) as against 1.3 million bales last year because of the slump.

In India, the state-run Cotton Corporation of India has upped its buying to protect the farmers which is also hurting the ginners. However, the textiles industry has strongly opposed any move to encourage raw cotton exports from India as that could impact the local textiles makers.