Cotton farmers counting the losses

Rajeshbhai Patel is not amused. The farmer in Kadi, northern Gujarat grew cotton on four bigha in this year’s kharif season, instead of 11 in 2016. He had reduced the acreage fearing increasing costs owing to pests attacks. But as cotton prices rule at unusually high levels in the ongoing harvest season, he is ruing at the missed opportunity.

So is the case with Ketan Nakumbh, a farmer from Jam Khambalia in Gujarat. "Looking at the prices this year, we feel like trying our luck next time again," Nakumbh adds.

Farmers like Patel and Nakumbh across the country had reduced the cotton acreages this year and chose to plant more of pulses and oilseeds, after being hurt by the increasing incidence of pest attacks, including that of the dreaded pink boll-worm and white fly. As a result, cotton acreage had shrunk by about a tenth over last year.

Despite the apex trade body — Cotton Association of India — estimating a bigger crop than last year at 341 lakh bales, on account of higher yields, cotton prices have witnessed a rally in the recent weeks.

Cotton prices have jumped by more than a fourth this year, to touch as high as ₹6,100 per quintal recently in the spot market of Gujarat, the largest producing state, as against ₹4,800 around the same time last year. Demand from overseas buyers such as China, Bangladesh and Vietnam has fuelled the price rally.

The demonetisation move, announced by the Narendra Modi Government in November, also played a role, as the cash crunch impacted market arrivals. Many of the farmers accepted payments in old currency notes but only when their produce got a premium, which resulted in a spike in prices, even driving up the global prices at the benchmark New York terminal. Cotton prices hovered around ₹4,500-4,650 a quintal in the last week of October 2016.

Many farmers continue to hold on to their stocks anticipating higher prices. "So far only 1.4 crore bales have arrived, and we are waiting for the crop of around 2 crore bales. ” said Rakesh Rathi, President, North India Cotton Association. “No other crop including pulses, paddy, guar or vegetables has been so attractive," he added.

"We expect the price to touch the ₹6,500-mark in February before softening. We, however, can't say that it will remain the same in the next season," says a functionary of National Seed Association of India (NSAI), on conditions of anonymity.

The increase in prices caps an agonising time for cotton farmers in the country. "The decision to grow cotton is taken soon after the summer, by when we get an idea about the price trend. But by the time the crop is ready, prices turn bearish. Still, as soon as most of us sell our crop, the prices start heading upwards," Nakumbh shares the experience of the past three to four seasons.

The attacks by pests complicates the situation. Several cotton growers in the northern parts had switched to other crops after the pest attacks, which increased expenditure on chemicals and pesticides. Many farmers opted for desi variety, instead of the Bt seeds.

“But today, all those farmers who grew pulses or vegetables are sad because of low prices, while cotton has brought cheer for farmers and made them the king," said Dilip Patel, a cotton ginner in Kadi.

Though India is the largest producer of cotton, the yields per acre are one of the lowest in the world. Things changed with the introduction of Monsanto's Bt-seed in India in 2002-03, and cotton sowing area grew significantly from about 87.86 lakh hectares in 2004-05 to 119 lakh hectares last year (it has dropped to 105 hectares this season). Bt cotton accounted for around 95 per cent of the area.

The shift has made a difference in the productivity, depending on the water availability, some argue. They say the crop is protected against the boll-worms, allowing it to grow its normal growth. Subsequently, yields increased from 2-5 quintals per hectare in the pre-Bt era, to 6-12 quintals per hectare.

Over the years, farmers like Patel across the country have chosen Bt-seed for a better crop. Gujarat was among the first to take up hybrid technology for cotton cultivation much before the introduction by Monsanto's seeds. Initially, the H4 variety, named Sankar-4 variety picked up but it faced issues of unopened bolls, which was overcome in Sankar-6 variety, which is widely used at present.

Despite the progress, the yield have stagnated for over a decade. An increase in pest attacks, and thus the production costs, have been a major problem plaguing the growers in recent years.

Cotton production which touched a record of over four crore bales in 2013-14, fell to 386 lakh bales in 2014-15 and declined further to 338 lakh bales in 2015-16, the lowest in last five years. The drastic drop during 2015-16 was mainly due to the white-fly attack.

The gains — mainly the yield advantage and the drop in spends on insecticides/pesticides —that the average Indian cotton grower saw with the introduction of the genetically modified or Bt cotton since 2002-03 are on the decline. This is mainly on two counts. Firstly, the current generation of Bt cotton - Bollgard II - introduced in 2009, has started weakening against the mence of pink boll-worm.

Secondly, over the last two years a new class of insects, called the sucking pests have emerged; this year they were found in Maharashtra. As a result, the farmers' spend on pesticides that had come down with the advent of Bt cotton, is again increasing. The escalating costs have squeezed the margins.

Pressure is mounting on farmers. Latest figures released by the National Crimes Records Bureau says that about 88 per cent of the suicides committed by farmers in 2015 happened in the seven states that grow cotton intensely (see box below).

"We thought the Bt technology would save our crop from worm attack. It did for a few years, but the problem continues to persist and the yield is falling with every passing year," Patel says.

The pink boll-worm, the worst nightmare for a cotton grower in the country, has made a comeback with an vengeance as it has been increasingly developing resistance to the Bt gene. Across the cotton-growing states including Karnataka, Andhra Pradesh and Telangana, reports of outbreak of pink boll-worm have surfaced this kharif season.

"The repeated outbreaks over the last two years shows that technology is not working," says S Ramaswami, Chairman and Managing Director of Rasi Seeds, one of the leading companies in the domestic seeds market. "However it is controllable, provided farmers use pesticides regularly," Ramaswamy adds.

White fly attack that caused significant losses to cotton growers in Punjab in the last two seasons had also become a menace for farmers in Maharashtra, though the intensity of the pest attack was not that severe as witnessed in the northern state.

"I had to take up at least four additional sprays to keep the white fly under check this year," says Champatrao Shinde, a farmer in Kharangana Gode village near Wardha in Maharashtra’s Vidharbha region. A round of insecticide spray would add costs by ₹1,000 per acre.

"Also, the rains this year, though timely, led to an increase in weeds, for which I had to incur an additional cost to remove them," Shinde adds. As a result, the cost of cultivation has gone up from around ₹16-18,000 per acre to around ₹22,000.

Though higher prices this year have helped him absorb the rise in costs, he is unsure about a repeat in the next season.

The seeds industry are also apprehensive of its future after the Government recently capped prices of Bt cotton seeds. While in the recent planting season the price control order had little impact given the excess supply, the breeders and seed companies were forced to offer discounts to the farmers. Nevertheless, the cap is a setback for many in the seeds industry.

Technology developers in the agri-biotech space say the move will hurt investments in research and development. This may have a major implication on the new products that are in the pipeline.

Immediately after the Government's move, Monsanto, through its local partner and investee company Mahyco pulled out the Bollgard II RRF — its next product in India for which it was seeking regulatory approval. Going a step ahead, Monsanto also threatened to pull out of the country.

Incidentally, Bayer acquisition of Monsanto in a $66-billion all-cash deal has triggered consolidation in the global agri-input space. Post merger, the consolidated entity would command 70 per cent of the cotton acreages in the US and in many other countries including India. Besides these developments, the uncertainty over commercialisation of the GM crops in the country continues.

This development clouds the prospects of cotton farmers looking for better and stronger seeds to withstand pest attacks. Otherwise, any new cotton seed could best be a variant of existing hybrids/technologies.

"Availability of a new technology in current scenario is very rare. There is no new technology in the pipeline. Unless new technology hits the markets, farmers have no option but to make do with the sprays for controlling the pink boll-worm," says Rasi's Ramaswamy. A breakdown might make it impossible to counter the boll-worm. "We are heading there in another two-three years," Ramaswamy warns while visualising the scenario of the pre-Bt days, when farmers needed up to 25 rounds of spraying to protect their crop. "The new products in the near-term would be mainly from better breeding efforts," said Bharat Char, Technology Lead at Mahyco.

In the absence of a new technology, the domestic industry might have to depend on the three alternatives that are emerging. The three include one each from public, private and non-governmental sectors. While the GM varieties developed by the Nagpur-based CICR (Central Institute for Cotton Research) are ready for use by farmers, some NGOs are holding the fort with the desi varieties.

The CICR is using the first generation GM technology in lanky desi varieties and is looking to promote the concept of high density plantation as against the relatively spacious planting in the hybrid model (hybrid plants require more space). CICR had taken up multi-location trials of the Bt varieties across the country and plans to select the varieties specific to the region.

CICR Director Keshav Kranti said the seed will help the farmers reduce the duration of the crop, drastically reducing the pressure on scare moisture in the rain-fed areas. Even if the yield reduces by a few bolls per plant, the losses could be made up as the farmers could plant more plants per unit of land.

“The cotton seeds developed by the CICR should be ready for use by farmers. However, the quantity could be small as it is the first year. Multiplication would happen for the following year,” said Rajesh Kumar Singh, Joint Secretary, Union Ministry of Agriculture and Farmers Welfare.

The Hyderabad-based Centre for Sustainable Agriculture (CSA) is experimenting with desi varieties. It has teamed up with small farmers in Telangana’s Adilabad, Warangal and Wardha districts, covering an area of 200 acres.

“We also follow the high density method. What we have observed is that hybrid cotton, suitable only for irrigated areas, is being grown in rain-fed areas that are suitable for the d esi varieties. The cost of production comes down significantly as usage of inputs is reduced,” said G Ramanjaneyulu, Chief Executive Officer of CSA. CICR is also trying to promote some of its desi varieties like the short-stapled Phule Dhanwantri.

Though this variety is seen to be resistant to pests like pink boll-worm, the yields are relatively lower to the Bt counterparts, besides having higher picking costs. While this makes desi seeds unpopular with farmers, CICR's Kranthi is bullish on the native option.

"The experience with the desi seed has been fairly good and that is the reason we expect higher sowing next year," added Rathi.

There have been calls to revive a shelved joint research project to develop a GM variety. While its future is still unknown, some firms have begun their own research initiatives. Nuziveedu Seeds (NSL), a top seller of BG-II seeds, is one among them. "Yes, we are developing one technology," said Chairman and Managing Director M Prabhakara Rao. The company is in the process of seeking regulatory nod for the trials.

In fact, the private initiative dates back to 2004 when the NBRI (National Botanical Research Institute) gave a licence to Swarna Bharat Biotechnics, a consortium of private seed firms. The two genes derived from (Bt) protects cotton against boll-worm and tobacco caterpillar. If the research schedule goes as planned, the NSL technology will take at least two years for use by farmers.

Besides, Rasi Seeds is also working on a new transgenic technology for cotton. Another transgenic technology for cotton has been developed by Delhi University’s Deepak Pental, who had also developed a transgenic mustard that's currently before the Government for approval. These efforts will have to be hastened to rescue the country’s cotton farmers faced as they are with unending hardships.

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