The Hindu Business Line : Cotton contracts not supportive of delivery-payment links: SICA

THE South India Cotton Association (SICA) has called for a higher transparency in cotton marketing from national associations in all cotton-producing economies in the world.

SICA has also sought the cotton economies to evolve a suitable `delivery-payment' links in the cotton supply chain and the association has said that this crucial issue is currently engaging the attention of the national cotton associations in India.

Making a presentation on the `national cotton associations and their contributions to the cotton economy' on behalf of SICA at the plenary meeting of the International Cotton Advisory Committee (ICAC), currently in session at Mumbai, the SICA Secretary, Mr K.N. Viswanathan, had pointed out that at present the cotton contracts were not effectively supporting the issues connected to the delivery-payment links. India is one of the few countries where delivery of cotton takes place before the value of cotton is paid for and this has resulted in unstable marketing conditions at local markets.

Efforts being taken by associations such as his to develop a system of earmarked funding for this purpose with the active cooperation of the domestic banking system may become a reality soon, he felt.

Mr Viswanathan felt that the domestic cotton sector and various national cotton forums had been witness to the new initiatives occurring in the cotton economy. Technology mission on cotton aimed at ushering in increasing the quality cotton fibre output, active involvement of private sector in cotton seed production such as the Bt cotton seeds and increased focus being given for organised cotton farming/village adopted cotton cultivation are some such initiatives offering new hopes.

But to meet the evolving dynamism in cotton trade, the national cotton associations should act proactive with a transparent system of marketing ensuring that the balance of benefits is passed on to growers, he said.

Organisations such as the Committee for International Cooperation Among Cotton Associations (CICCA) should take a lead role in ensuring healthy marketing practices in developed economies.

He also suggested the national cotton associations should hold annual meetings to deliberate subjects such as contamination reduction, ginning and pressing, modernisation etc besides cotton crop development and marketing. And these annual meetings can also be attended by buyers and sellers from across the globe, he said.