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In what has come as a relief to cotton growers in Gujarat, the State government has announced a bonus of ₹500 per quintal over and above the minimum support price of ₹4,020.
Announcing the decision, Chief Minister Vijay Rupani said the State anticipates a production of 50.50 million quintals of the fibre for kharif 2017.
The State is due to have Assembly elections by December.
The move will put a financial burden of ₹1,250 crore on the State exchequer.
According to the State government’s announcement, the bonus will apply to the three varieties of the cotton — small staple, medium staple and long staple, which have an MSP of ₹4,020, ₹4,270 and ₹4,320 per quintal respectively. Currently, the market price for cotton hovers between ₹4,210 and ₹4,700 at the Rajkot market.
Procurement operationsAfter the additional bonus, the effective procurement price of cotton will touch ₹4,820/quintal.
The procurement of cotton at the MSP + bonus rates will begin from November 1, from 40 procurement centres out of the 56 in the State.
The State government along with the Cotton Corporation of India will carry out the procurement process.
Cotton acreage in the State stood at 26.41 lakh hectares, about 5 per cent lower than the 27.25 lakh hectare normal acreage in the State.
Gujarat is the largest producer of cotton in the country, followed by Maharashtra and Telangana.
The districts of Saurashtra including Surendranagar, Morbi experienced massive flooding during the monsoon, affecting the crop.
However, considering the losses, the government’s decision of bonus over and above the MSP has been welcomed by the farmers.
Flood impactMeanwhile, in a separate announcement, the State government has approved the formation of a State Crop Insurance Fund as part of the Prime Minister Fasal Bima Yojana.
The fund will be the implementing agency for PMFBY in the State.
Under the State Crop Insurance Fund, a pool of funds will be created with farmers’ premium, Central crop insurance assistance and State Crop insurance assistance, thereby enabling faster disbursement of claims.
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