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The Centre on Wednesday approved plans to financially help the ailing cotton sector, which has been hit by higher production and lower prices, and declining exports.
The Cabinet Committee on Economic Affairs (CCEA) also approved additional support to meet the anticipated losses in disposal of the crop procured by Cotton Corporation of India (CCI).
Further, it gave ex-post-facto approval to the Maharashtra State Co-operative Cotton Growers Marketing Federation Ltd (MSCCGMFL) to undertake minimum support price (MSP) operations as a sub-agent of the CCI, the government’s nodal agency for procurement of cotton at MSP.
MSP support The MSP for cotton was fixed at ₹3,750/quintal for medium staple and ₹4,050/quintal for the long staple variety for the current year.
“This decision will help in price support operations of 110 lakh bales (100 lakh bales by CCI and 10 lakh bales by MSCCGMFL) during the current cotton season to help stabilise cotton prices and alleviate farmer distress. This operation is primarily aimed at safeguarding the interest of the farmers and avoiding any distress sale,” said an official statement.
The Cotton Association of India (CAI) has an estimated output of 391 lakh bales (of 170 kg each), a decline from the 407.25 lakh bales registered in during 2013-14. Unseasonal rains in key central Indian cotton-growing States such as Maharashtra, Gujarat and Madhya Pradesh have also led to the slide in output.
Export decline expected Exports are likely to fall sharply to 70 lakh bales, down from117.9 lakh bales last year, mainly due to lower demand from China.
Commerce Minister Nirmala Sitharaman said the Textiles Ministry had already communicated with cotton-deficit countries to increase overseas sales.
“The Ministry of Textiles has written to Indian High Commissions/Embassies in cotton deficit countries like Bangladesh, Vietnam, Indonesia, Turkey and Thailand to explore new avenues for export of cotton to stabilise cotton prices in India,” Sitharaman said in the Rajya Sabha on Wednesday.
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