There is a good news for cotton farmers. In addition to Cotton Corporation of India (CCI), they soon can 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.
The MSCGCF, which operates as a sub-agent of the CCI in Maharashtra, has plans to purchase about 100 lakh quintals of cotton from farmers at a price of R4,100 per quintal. The amount will directly be credited into the bank accounts of farmers, its chairman NP Hirani said.
Hirani said the Maharashtra State Cotton Growers Cooperative Federation (MSCGCF) will keep a tab on any manipulation by traders. The project is still in a nascent stage and officials are expected to prepare a report in a couple of days. After the approval from the Centre, procurement can begin from various Agriculture Produce Market Committees in the state, he added.
Meanwhile, the MSCGCF has begun purchase operations in Maharashtra on Thursday with the opening of around 20 cotton purchase centres across the state. These will be increased to 96 centres in a phased manner. This year, too, the government has asked the CCI to buy cotton from farmers as and when price drop below the MSP level. Last season, the federation purchased only 26 lakh quintals.
According to Hirani, the federation was to begin cotton purchase from November 15, but it has gone ahead with purchases ahead of Diwali to help out farmers. The MSCGCF has received nearly Rs 50 crore from the state as margin money and plans to use this raise Rs 800 crore worth funds from various banks. A bumper cotton crop is expected in the state this year. Significantly, Vidarbha has the largest area under cotton cultivation in the state. This year, the yield is expected to be between 350 and 380 lakh quintals against 300 lakh quintals last season, Hirani added.
Incidentally, last week some private traders started purchases and already collected about 1.5 lakh quintals at rates fluctuating between Rs 4,150 and Rs 4,450 a quintal. Since cotton is generally not stored for more than two years, there is a possibility of opening of imports this year. Supplies are expected to go up after Diwali dues totalling Rs 11,000 crore of farmers were cleared by the federation last year.
Although there have been no reports of cotton procurement in other states, the government has directed the CCI to commence purchase operations in Punjab. However, there are unconfirmed reports of some procurement is happening in some parts of Andhra Pradesh and Telangana.
India spent Rs 16,000 crore to buy 87 lakh bales of cotton at a government-set MSP in the year that ended on September 30, up from just 400,000 bales in the previous year. The Cotton Advisory Board (CAB) has forecast production at 365 million bales of 170 kg each for the cotton season 2015-16.
