Maharashtra cotton output trebles after end to monopoly in procurement

Cotton production in Maharashtra has almost trebled in the last five years. From a mere 35 lakh bales in 2005-06, the production has increased to 92 lakh bales in 2010-11, a growth of 162 per cent, according to the figures released by the Cotton Advisory Board.

Government officials and industry experts attribute this rise in production to the termination of Cotton Monopoly Act of Maharashtra Government. The Act, which came into force in 1972, ensured that only the State Government could procure cotton from farmers, at a predetermined price. The act was repealed in 2004, after heated discussions in the State Assembly.

The Cotton Advisory Board (CAB) statistics show that while production in Maharashtra has increased considerably, the actual area under cotton has gone up by 38 per cent. During the same period, in neighbouring Gujarat, production increased by 15 per cent and cotton area by 33 per cent. Andhra Pradesh's cotton production increased by 66 per cent, riding on a 70 per cent growth in area under production.

Maharashtra Government's Principal Secretary (Textile), Mr Sunil Porwal, told Business Line that repealing the act has created a virtually new market not only for cotton trading but also for ginning and pressing industry. “In the next two years, Maharashtra could become the largest producer of cotton in the country,” he said.

“Many attribute higher production of cotton in Maharashtra to the success of Bt cotton seeds. But if that was the case then many other States would have shown similar numbers. Plus Maharashtra's irrigation potential has only increased marginally in the last five years. Therefore, what has emerged as a key differentiator is the sunset of the Monopoly Act,” he said.

Mr Ashish Gujarati,Vice-President, Maharashtra Ginners and Pressers Association, said that farmers and traders are getting better rates only due to the termination of the act. The processing units are also getting better quality cotton because of the competition between traders for acquiring quality cotton. During the monopoly regime, there was no premium on fine quality cotton,” he said.

The Secretary of the Khandesh Ginners and Pressers Association, Mr Bharat Agarwal said that as long as the Monopoly Act was in force, cotton prices never went beyond Rs 3,200 a quintal but now the rates have touched Rs 7,000 a quintal.

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