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Journalism of Courage
Last year, when India’s cotton production was booming, it was marred by the irony of farmer suicides. Now, as the country prepares to become the world’s second largest cotton producer thanks to the aggressive use of Bt cotton seeds, an unlikely development is threatening to shadow the achievement and force the Government’s urgent intervention, especially if it shifts into election mode.
It’s the darker side of the Bt cotton success story. As these seeds yield only high-quality medium and long staple cotton, there is a severe shortage of low quality short staple cotton, of which India has always had a surplus. This is adversely affecting the small-scale spinning and handloom sector, which employs 13 million workers and produces 20 per cent of India’s cloth.
The handloom industry relies on the coarse count yarn manufactured from short staple cotton, but its production has dipped sharply from 16.25 lakh bales in 1996-97 to just 7 lakh bales in 2005-06 (see graphic). The numbers are becoming worse every year, says R. Kuppusamy, president of the South India Small Spinners Association. “Short staple cotton was abundantly grown in Punjab and Karnataka, but both farmers in both the states have taken up Bt cotton in a big way,” he says.
“The manufacturers of coarse count cotton yarn are forced to use medium staple cotton, which increases their raw material cost and consequently our costs by at least 10 per cent,” says Kuppusamy, who raised the issue with Prime Minister Manmohan Singh at last week’s Textile Summit in Delhi.
Cotton production is estimated at 287 lakh bales in the season ending this month, while consumption is estimated at 300 lakh bales. Factor in the export of about 50-55 lakh bales of cotton with the prevailing high cotton prices, and the raw material shortage could affect the other segments of the textile industry as well. But instead of asking for the usual dose of protectionist measures, the spinners have stressed that they are “not against the export of cotton if it is beneficial to farmers”.
It’s a sign of how India’s small-scale sector is maturing to the realities of a globalised world that they have asked the government to allow duty-free import of cotton to “create a balance in the market” to overcome the shortage and to bring down the cost of cotton. Interestingly, the south Indian spinners have asked for duty to be cut on all varieties.
S.P. Oswal, chairman of the Vardhman group and head of a government working group on physical inputs for the textile sector, agrees. “Raw material should be available at international prices. If there’s a shortage, imports are necessary to ensure free access to inputs. Indian textiles already suffer a 10 per cent disadvantage due to unnecessary transaction costs, power outages and restrictive labour laws.”
Currently, imported cotton attracts a 10 per cent duty. “The PM told us he will consult the Finance and Commerce Ministries before taking a decision,” Kuppusamy said.
