Cotton ties up Pawar in knots

As a way out, he is exhorting the Cotton Corporation of India (CCI) to purchase cotton, so that the State Cotton-Growers Co-operative Marketing Federation—the purchase wing of the government—doesn’t have to take on the burden.

It is not really an effective solution, since the CCI purchases cotton only at the Centre-determined minimum support price, which is at least Rs 700 less than the MCPS price.

Three years ago, the State government diluted the MCPS by allowing private buyers to purchase cotton from farmers. Though the farmers—particularly those from Vidarbha—preferred the MCPS to the trader option, objections were muted since open market prices were competitive and, unlike in government purchase, made in one go.

At the same time, farmer leaders like Vijay Jawandhia demand the continuation of MCPS, which guarantees a particular level of income irrespective of market fluctuations—as this year.

In Vidarbha, the cotton acreage has gone down massively because of the high input-low returns economy of the labour-intensive crop, as farmers switched to soyabean. In the Amravati revenue division, cotton acreage has dropped from 16 lakh hectares to 10 lakh hectares, according to Joint Director B T Talhande. ‘‘But the harvest was good, thanks to the scanty but scattered rains. The likely lint average is 145 kg/hectare,’’ says Talhande.

But Jawandhia points out that soya prospects are grim. ‘‘Prices have come down to about Rs 800/quintal, almost half of the maximum price soya fetched last year. In this situation, farmers will be looking to a good price for cotton. The state government must take the guarantee under the MCPS,’’ he says.

Till three years ago, Maharashtra spent an average of Rs 3,000 crore annually towards cotton purchase. Last year, it came down to less than Rs 1 crore, as virtually all the produce was sold out in the buoyant open market.

This year, however, Cotton Federation Chairman N P Hirani is expecting yards to be flooded with cotton. ‘‘We are gearing up for it and the government has arranged for Rs 1,000 crore,’’ he told The Indian Express. ‘‘With acreage going up in Khandesh and Marathwada, we are expecting production of up to 200 lakh quintals in the State.’’

But the cash-strapped government won’t be able to cope with the rush, what with more than Rs 3,000 crore being required to purchase anywhere between 100-150 lakh quintals at the MCPS rate of Rs 2,300 a quintal.

That is where Pawar comes into play.