NP Hirani said the cotton growers federation has begun MSP purchases on behalf of CCI in the state.
The Maharashtra State Cooperative Cotton Growers Federation (MSCCGF) has tied up with the cash-rich Cotton Corporation of India (CCI) for MSP purchases in the state. It has happened for the first time in 5 years after the National Agriculture Cooperative Marketing Federation of India (Nafed), which normally carries out MSP operations, expressed its inability citing lack of funds.
During this season, the credit limit of Nafed has been exhausted and the agency has expressed inability in providing funds to us for procuring cotton, said NP Hirani, chairman, MSCCGF.
Hirani said the cotton growers federation has begun MSP purchases on behalf of CCI in the state. This is an interim arrangement until Nafed manages to get funds from the Centre.
Hirani had been following up with Nafed to ensure that the tie-up is done but finally had to enter into a tie-up with CCI, which is a cash-rich organisation under the ministry of textiles.
MSCCGF has an initial amount of R1.5 crore for procurement. According to market sources, it is expected to receive R30 crore from the state government on the basis of which it plans to borrow another R120 crore as initial funds for the operations.
Hirani said the federation is in a position to procure around 100 lakh quintal of cotton from farmers at R4,050 per quintal. So far the federation has established some 20 centres for procurement and has procured around 2,790 quintal in a week. The response has been slow and arrivals are yet to pick up, Hirani explained.
According to him, Nafed is going through a financial crisis and had suffered losses during the MSP operations of groundnut and gram.
BK Mishra, MD, CCI, said that CCI had so far procured 5.5 lakh quintal and has opened around 175 centres for purchase of cotton from farmers.
The plan is to open around 341 centres across Telangana, Andhra Pradesh, Maharashtra and Gujarat, he said.
In Punjab and Haryana, prices of cotton are above MSP and therefore there is no need for purchase, he pointed out, adding that since Nafed had an issue with funds, the Maharashtra Cotton Federation had tied up with CCI in an interim arrangement.
When contacted, Bijendra Singh, vice-chairman, Nafed, said that the agency has approached the Centre for release of funds. Nafed has requesred the Centre to make good the losses of 15%. In principle, the government and the Parliamentary Accounts Committee have agreed that the losses should be covered by the government, Singh said.