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Low cotton rates worsen farmers' plight
http://timesofindia.indiatimes.com/city/nagpur/Low-cotton-rates-worsen-farmers-plight/articleshow/17800917.cms
** Farm activists are however demanding a higher MSP. Kishore Tiwari of Vidarbha Jan Andolan Samiti said MSP has to be enough to cover the cultivation cost, leaving 50% margin of profit. The current MSP of Rs3,900 is too less to meet the cost which has almost doubled this year. Last year, there was no need for MSP operations as the rates were at a comfortable Rs4,400 to Rs4,500 level, Tiwari said. **
NAGPUR: It's turning out to be the worst year for cotton growers all over the country as almost 14% of the total crop reaching market yards has been sold at a minimum support price (MSP) to Cotton Corporation of India (CCI). As against the arrival of 74 lakh bales in markets throughout the country so far, 11 lakh bales have been purchased by at MSP. Last year, there was no MSP purchase by CCI.
MSP is the last resort and 14% is a fairly high percentage, say observes. The current market rates range between Rs4,000 and Rs4,200 a quintal and the MSP is fixed at Rs3,900. It is meant to ensure the least possible rate to the grower so as to prevent a loss. Although there have been demands to increase it to Rs5,000 to Rs6,000, it has gone up by Rs500 as against the last year.
Realizing that the rates may crash further, CCI has set up a special MSP cell to monitor the market support operations in the country. In Vidarbha, where cotton is linked with the agrarian crisis, CCI has made purchases mainly in Wani.
Even as CCI is the nodal agency which intervenes in the market when rates crash, certain state government bodies like Maharashtra Cotton Marketing Federation also buy at MSP. So the total number of MSP purchases, including the state agencies, can be higher.
In the state, CCI has so far purchased around 1 lakh quintals cotton while the state federation 4,000 quintals, said a source. This comes to 20,000 and 800 bales respectively.
Currently, most of the CCI purchases have taken place in Andhra Pradesh which covers the neighbouring districts of Maharashtra too. The CCI has 55 centres in Maharashtra which will get operational as soon as the rates tend to crash below the MSP. So far, the situation remains under control, said an officer involved in the process.
The rates are low due to abysmal international demand. In the US, cotton output is more than the demand as well as the production capacity of the textile industry. China, which is one of the major buyers, has not gone for bulk imports as yet. The Chinese textile units, facing shrunk margins, are buying on day to day basis.
Farm activists are however demanding a higher MSP. Kishore Tiwari of Vidarbha Jan Andolan Samiti said MSP has to be enough to cover the cultivation cost, leaving 50% margin of profit. The current MSP of Rs3,900 is too less to meet the cost which has almost doubled this year. Last year, there was no need for MSP operations as the rates were at a comfortable Rs4,400 to Rs4,500 level, Tiwari said.
Vijay Jawandiya, a veteran farm activist, said soybean, with rates around Rs3,000 a quintal this year, has somewhat compensated for the farmers' loss on cotton. However, there are chances that the rates may come down so the government should hike the soybean MSP which is at Rs2,200 a quintal to Rs3,300.
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