Cotton procurement remains subdued so far this season

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Pune | Published: December 10, 2015 12:08:45 AM

Cotton procurement by government agency Cotton Corporation of India (CCI) has been pretty subdued this season. CCI has procured only 5 lakh bales of cotton so far as prices are on the higher side.

Cotton procurement by government agency Cotton Corporation of India (CCI) has been pretty subdued this season. CCI has procured only 5 lakh bales of cotton so far as prices are on the higher side. With world cotton consumption slowing down and the demand for a higher minimum support price (MSP) for cotton emanating from some states, the Centre is also planning to introduce direct benefit transfer scheme for cotton farmers as well.

Cotton procurement through the traditional route of CCI or state federations has been subdued this season,and is expected to be lower than last year due to firm prices, which are ruling above the MSP, top officials said. In the 2014-15 marketing season that ended in October 2015, CCI had procured a record 86 lakh bales of cotton across the country. The government has already fixed the MSP at R4,100 per quintal for long staple cotton and Rs 3,800 per quintal for medium staple cotton for the 2015-16 marketing year.

According to B K Mishra, CMD, CCI, market prices are currently hovering around Rs 4,300 per quintal while the MSP has been fixed at R4,100 per quintal, making it unnecessary for the agency to intervene, he said. So far, CCI has procured cotton from Telangana, Andhra Pradesh and Akola in Maharashtra. CCI aims to procure about 20-25 lakh bales (of 170 kg each) in the 2015-16 marketing year, which runs from October to September. Cotton prices are ruling lower in the wake of poor export demand, especially from China. According to the Cotton Advisory Board, India’s cotton output is estimated to be lower by 15 lakh bales at Rs 365 lakh bales in 2015-16.

Mishra reiterated that cotton rates have not fallen below the MSP in all states. It would definitely procure cotton from those places where prices are ruling below the support price, he said. Output may be 3-5 lakh bales on the lower side in Tamil Nadu and Andhra Pradesh due to the recent spell of rains, he said. There is an expected slump in cotton output by 5-10 lakh bales this year due to various reasons, including white fly attacks and sparse rains.
Cotton production is expected to be around 370 lakh bales this year as the overall acreage has shrunk. The agency plans to open around 330 centres across the cotton growing regions of the country.

Mishra said that the CCI has been attempting to bring farmers into financial inclusion to prevent them from getting exploited by moneylenders. A pilot project under the Direct Payment Deficiency System (DPDS) for paying MSP guarantee for the cotton farmers has been initiated at Hinganghat taluka of Maharashtra. Under this system, farmers will directly get the amount which is the difference between the MSP and the market price, should the market price fall below the MSP.

To avail of the benefit, farmers would have to present proof of cotton sold at Agriculture Produce Market Committee yards, plus other papers such as ownership document, yield estimation and other details. If the pilot is successful, the DPDS would be rolled out in all cotton growing regions. Textiles secretary S K Panda said the new move would benefit the farmers substantially.

Dull market
* Cotton procurement by government agency Cotton Corporation of India (CCI) has been pretty subdued this season. CCI has procured only 5 lakh bales of cotton so far as prices are on the higher side
* CCI has procured only 5 lakh bales of cotton so far as prices are on the higher side
* With world cotton consumption slowing down and the demand for a higher MSP for cotton emanating from some states, the Centre is also planning to introduce direct benefit transfer scheme for cotton farmers as well
* In the 2014-15 marketing season that ended in October 2015, CCI had procured a record 86 lakh bales of cotton across the country
* The government has already fixed the MSP at Rs 4,100 per quintal for long staple cotton and Rs 3,800 per quintal for medium staple cotton for the 2015-16 marketing year

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