'Ban Cotton Monopoly Procurements'
"The monopoly procurement scheme in Maharashtra should be abolished and other government agencies such as CCI and the State Federation should make purchases only on commercial basis. They should not be allowed to build up huge stocks with their money powers" said Dev Mittar Ahuja, Managing Partner of Khemchand Bahadarchand Ahuja, Abohar (Punjab) in an interview with Devendra Vyas. Excerpts:
The cotton production in the Northern belt has come down to about 28 lakh bales from 50 lakh bales about four years back. Why ?
There is no doubt that the cotton production in the Northern belt has come. However, the fall in production last year was substantial mainly due to unseasonable and untimely rains, American ballworm attack, leaf-curl diseases and water logging.
The major factors responsible for low production are considered to be non availability of certified seeds, low land fertility, low productivity and fragmentation of land holdings.
The research institutions lagged behind in introducing new varieties of cotton seed having high physical genetic purity, high germination percentage and seeds free from pests and diseases.
The distribution system being neglected in this area, the farmers could not get the specified certified seeds in abundance and switched to many other unrecognised varieties. The seeds got mixed up in the name of prevailing commercial varieties.
The farmers have overexploited the land by taking two to three crops from the same land in one year by using chemical fertilisers and pesticides indiscriminately. This has brought down the fertility of land effecting the general production.
The economical viability of the cotton crop has come down as compared to other crops such as sugarcane, paddy and pulses. In this region, the following yearly rotation method is adopted for the same land. Paddy and wheat, cotton and wheat, sugarcane (one crop).
With the productivity coming down in cotton, the viability of paddy, wheat or sugar cane improved. The other factors considered for low productivity is fragmentation of land holdings. The average land holding size in rural India under cotton cultivation is commercially unviable. The land is fragmented under the law of inheritance in to small holdings and this affects its productivity.
In case of the crop failure, the farmers are unable to meet their expenses because of this nonviability.
In Punjab, the water-level in the soil is gradually increasing which is said to be ideal for the rice crop and farmers are switching over to rice as well as other foodgrain crops. How do you see the future cotton crop in this light ?
There is no doubt that the water level in certain areas is gradually coming up, however, underground water in most of the cotton sowing is entirely dependant on canal irrigation. The farmers are switching to paddy where the water is suitable for irrigation and enough supply of electricity is there for tubewells.
In Punjab, the farmers have reduced cotton cultivation from 6.70 lakh hectares to 5.50 lakh hectares. The prospects are that the cotton cultivation will vary between 6.0 to 6.25 lakh hectares in the years to come. The optimistic increase in cultivation next year is attributed to the fact that the Punjab government has laid down the drains in the areas falling under water logging. The water level has already started falling.
What measures do you suggest to increase cotton yield in India which is quite low in comparison to the world counterparts?
To increase cotton yield the University institutions will have to introduce hybrid and new seed varieties. The distribution system will have to be evolved to make available the right seeds to the farmers in abundance.
There is no denying the fact that the certified seeds production is capital intensive and involves special efforts but the requirement of the farmers should be met by maximising production.
It is understood that Cotton Corporation of India and many other states have entered into an agreement to enhance production and distribution of certified seeds. This is a step in the right direction.
The improvement of land fertility is necessary and the accent should shift to more organic manure and biofertilisers rather than depending mainly on chemical fertilisers which are also costlier. The shift will improve soil texture and fertility in the long run.
Do you think futures trading in cotton is necessary in India ?
The futures trading in cotton should bring stability in the cotton prices so that the industry and trade get the benefits of stability. Futures trading is possible and will be successful because we are also having such trading in other commodities as well.
Please comment on the existing Exim policy vis-_-vis raw cotton.
The present exim policy with regard to cotton needs change. The export of Bengal deshi should be under OGL as the production of this variety is much more than consumption in India. In staple cotton the export quota should be given to the effective government agencies and general trade. It should not be on selective categorisation. However, limited quantity of export quota can be issued positively every year.
What do you suggest to bring price stability in cotton market ?
Cotton price stability can be maintained with the total float of commodity in the market. Keeping this principle in mind, monopoly by anyone i.e., trade or government, should be discouraged.
The monopoly procurement scheme in Maharashtra should be abolished and other government agencies such as CCI and State Federation should make purchases only on commercial basis.
They should not be allowed to build up huge stocks with their money powers. The Maharashtra monopoly system exploits industry at the time of shortage and subsequently other varieties pick up the prices. It is against the interest of cotton textile as a whole.