The Hindu Business Line : Cotton traders urged to pay farmers more than MSP

Avoiding intervention
Government agencies support the market by making intervention purchases if farmgate prices fall below the MSP
Mr Waghela has requested the industry to buy cotton above MSP to avoid Government intervention

Mumbai , Aug. 6

The Union Minister for Textiles, Mr Shankarsingh Waghela, on Saturday urged cotton traders to pay farmers prices above the Minimum Support Price (MSP).

The Government protects the interest of cotton growers by announcing a MSP each season. Government agencies support the market by making intervention purchases if farmgate prices fall below the MSP.

He said the cotton trade and industry should buy cotton above the MSP so that Government intervention is avoided and farmers receive remunerative returns.

The country's agriculture sector has been doing well in the last two years, thanks to higher production, rising consumption and exports. Yet, all is not well with the cotton sector because growers need to get a better deal.

"The cotton trade and industry must engage in contract farming and water management schemes that would benefit all stakeholders, particularly growers," Mr Waghela said.

Cotton trade conference

He was addressing over 200 delegates from different parts of the country congregated as part of all-India cotton trade conference organised by East India Cotton Association (EICA) here on Saturday. The key to successful farming is to reduce dependence on monsoon, the Minister pointed out, adding that farmers have to be taught appropriate agronomic practices.

Although cotton export performance during the current season was commendable — shipments during 2005-06 were an estimated 45 lakh bales — Mr Waghela expressed displeasure over rising raw material exports. "I am not in favour of raw material export like iron ore or cotton; we must add value domestically and export value added products," he exhorted the participants.

Rising demand

Speaking on the occasion, the Textile Commissioner, Mr J. N. Singh, said in the Eleventh Five Year Plan demand for cotton is projected to rise by 12 per cent a year. For 2005-06, mill consumption was an estimated 182 lakh bales, a rise of 10 per cent from the previous year. Exports, initially estimated at 45 lakh bales, could eventually total 50 lakh bales, he said.

The tenure of Technology Mission on Cotton set to expire by March 2007 may be extended by two years in order to further strengthen the cotton economy.

Increasing exports

Earlier, Mr Kishorilal F. Jhunjhunwala, President, EICA, said the golden era of Indian cotton exports had begun. From being a large importer until three years ago, the country has been transformed into an exporter and Indian cotton is now accepted in many major importing countries including China, he asserted.

Listing out some important steps for strategically enhancing cotton exports, the EICA president said cotton should be removed from the purview of Essential Commodities Act as the commodity is no more in short supply.

More Stories on : Contract Farming | Cotton | Agricultural Policy | Textiles

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