Procure cotton at MSP, Govt tells CCI

Area under cotton cultivation this season has increased substantially to nine million hectares from 7.83 million hectares last year on account of remunerative prices in 2003-04.

Because of this and increased productivity, a record output of 19.4-20.0 million bales or more was expected, Singh pointed out. She said the ministry was worried about the effect such high levels of output would have on the prevailing market prices. In addition, the International Cotton Advisory located in Washington DC has estimated an all-time high production in 2004-05—nearly 15 million bales more than last year.

Meanwhile, officials said due to increasing arrivals of cotton in the market, prices are skidding and farmers in North India are selling their produce below MSP.

The Government hiked the MSP for 2004-05 for the F414 cotton variety to Rs 1,760 a quintal from Rs 1,725 per quintal. MSP for the H4 variety was increased to Rs 1,960, from Rs 1,925 a quintal.

The secretary also pointed out that the industry may also import high quality cotton, further depressing domestic prices. This year, there is adequate production of this high quality cotton in the southern zone. ‘‘Our growers are dependent on our textile industry for remunerative prices for their produce and if we fail them, it is very likely that farmers will move away from growing cotton…’’, says the letter from the Agriculture Ministry. The main cotton producing states are Punjab, Haryana, Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Karnataka, Tamil Nadu and Orissa.