Pawar asks FM to abolish cotton import duty

"I am concerned that the decision to reduce import duty on raw cotton has been taken without consulting the Ministry of Agriculture and such a decision would adversely affect cotton growers/farmers," Pawar said in a letter to Chidambaram.    

 The government had earlier this month abolished 14 per cent customs duty on cotton, yielding to the demand of yarn makers, who complained of high raw material prices. It also withdrew the export incentives in the form of one per cent duty drawback.     

 

"I, therefore, request you to review the same keeping in view cotton farmers' interests," he said, adding his ministry was instead in favour of increasing the customs duty to 20 per cent.     

Such an increase in customs duty could effectively protect the interest of the farmers who had started getting good returns due to rising domestic and export demand.     

Cotton prices have shot up by 42 per cent since January, resulting in a high raw material cost for yarn mills.     

As per the government estimates, the cotton production in 2007-08 would be record 258.06 lakh bales, against 226.32 lakh bales in the previous year. One bale equals to 170 kg.     

"This significant improvement in the production has been possible largely due to adoption of BT cotton by farmers, remunerative prices and favourable climatic conditions," Pawar said.