Maharashtra Ends Cotton Purchase Monopoly Plan

Maharashtra ended its monopoly cotton procurement scheme (MCPS) and permitted private players to purchase cotton directly from farmers. However, the government has empowered the Maharashtra State Co-Operative Cotton Producers Marketing Federation (MSCCPMF) to control the sale and ensure prompt payment from traders to farmers.

Announcing the change, chief administrator of the Cotton Federation, N. P. Hirani, pointed out that the state government had modified the original MCPS launched in 1971 to protect farmers from exploitation.

Though the Cotton Federation would continue to procure cotton under MCPS, private operators, traders, co-operatives and private ginning and pressing factories besides Cotton Corporation of India (CCI) could procure cotton from producers after obtaining licence from authorities.

Procurement would be permitted from this season but would be monitored to check exploitation.

MCPS had accumulated losses worth Rs. 3000 crore and an additional Rs. 1000 crore loss was incurred last year. The Centre and Reserve Bank of India had asked the state to discontinue MCPS in 1999.

Private players would have to procure cotton not below the assured price announced by the state, which was Rs. 1875 per quintal last year. Cash payment would have to be made within 48 hours. The nnew system would boost ginning and pressing activities and yield sales tax to the state Government besides ending inter-state cotton smuggling.

This year, area under cotton declined from 30.20 lakh hectare to 25.57 lakh hectare, and crop size would be 140 lakh quintals.