Customs duty on cotton won’t help farmers much: Farm Activist

Finance Minister Nirmala Sitharaman on Monday announced customs duty of 10 per cent on cotton in the Union Budget.

Jawandhia said, “It will make imported cotton costlier. This can only be described as something is better than nothing. It will make the long-staple imported cotton, called Egyptian cotton, a bit costlier but will not much affect prices of other cotton to farmers’ benefit.”

Jawandhia has always been critical of lack of import duty protection to cotton farmers, similar to the one given to sugarcane growers.

He further said, “The finance minister’s information that the current government has spent more on wheat procurement this year than the Congress government in 2013-14 is misleading. The MSP then was Rs 1,200 per quintal compared to Rs 2,500 per quintal today. Also, increase in irrigation over the years has led to more production.”

“Similarly, the minister also said that her government has spent Rs 25,000 crore on cotton procurement this year compared to much less in 2013-14. But the open market price in that year was much higher so no procurement was necessary. What she didn’t reveal was how much did her government procure in the previous three years. This year’s procurement was higher because of general slowdown due to the Covid-19 pandemic,” said Jawandhia.

He also described the increase in farm credit from Rs 15 lakh crore last year to Rs 16.5 lakh crore this year. “The increase is marginal and such increase is usually done in budgets. What needs to be seen is most farmers go into defaults and hence become ineligible for fresh credit. Hence, the hike in farm credit outlay actually makes little sense,” Jawandhia said.