Increase in MSP for cotton may affect exports: SIMA

Southern India Mills Association (SIMA) today said though the steep increase in MSP for cotton would benefit farmers it would have an impact on the cost of clothing and also the industry.

The decision may also affect cotton exports if Indian cotton prices ruled above international prices, SIMA Chairman, P Nataraj said in a statement.

He also hailed the proactive and historic initiatives taken by Prime Minister Narendra Modi to strengthen the agriculture sector that would greatly benefit cotton farmers.

The SIMA chairman appealed to the Prime Minister to exercise cotton MSP operation under Direct Benefit Transfer System (DBT) and revamp the role of Cotton Corporation of India (CCI) so as to benefit the farmers and the industry equally.

India has been the largest cotton producer in the world since 2015-16 surpassing China and USA and nearly 2.3 crore farmers are currently cultivating cotton, he said.

Price volatility in cotton prices has also been eroding the working capital and profit margins of the industry and restricting the growth rate between 6 and 8 per cent as against the potential growth rate of 12 to 16 per cent as predicted by many studies, he added.

India could become the largest producer of cotton taking advantage of Technology Mission on Cotton (TMC) that existed between 1999 and 2002 and also the introduction of Bt Cotton, he said.

Nataraj also said the TMC has not been extended and the farmers were suffering due to issues like spurious seeds, lack of seed technology, agronomy research, lack of technology transfer, quality deterioration at ginning stage (admixture of waste cotton, inferior quality cotton, high trash, contamination, high moisture content.

The SIMA chairman urged the Prime Minister to approve TMC-II proposal already submitted by the Ministry of Textiles and to constitute a Task Force comprising various stakeholders under Ministry of Agriculture and Textiles, prepare a detailed report based on the recommendations already made.

Therefore, price stabilisation fund scheme and TMC with revised format are the need of the hour to make Indian cotton farmers to double their income and the industry to double its business size and exports by 2022 as envisaged by the Prime Minister, he said.