Cotton season kicks off on upbeat note

The cotton season for 2005-06 has begun at 37 purchase centres opened by the Guntur branch of Cotton Corporation of India (CCI) at the government market yards in coastal Andhra Pradesh.

All players connected with the cotton segment, including the usually sceptical farmers, are in an upbeat mood as the Centre has decided to set up a textile park at Yadlapadu in Guntur district.

The minimum support price (MSP) of Rs 2,100 per quintal for 28-31 mm best quality cotton kappas (with seed) offered by CCI is Rs 100 more than what farmers are getting in the open market.

As against a cost of Rs 14,000 for average production of eight quintals per acre, farmers get Rs 16,000, leaving them with a meagre profit of Rs 2,000. But they hope the price would go up in the coming days.

Revising its earlier estimation, CCI has placed the crop in Andhra at 28 lakh bales (1 bale = 170 kg) while Andhra Pradesh Cotton Corporation (Apcot) has put the crop at 32 lakh bales vis-a-vis the last year harvest of 35 lakh bales.

Avatar Singh, deputy general manager, CCI, told Business Standard that Cotton Corporation initially began its purchase operations in Khammam district. It opened 15 purchase centres in Guntur district, 12 in Khammam district, four in Prakasam district and three each in Krishna and Nalgonda districts.

"CCI will also compete with traders in the open market as part of its commercial operations. In many cases, we have paid above the MSP for super quality cotton," he said, adding, "the recent rains and floods heavily damaged the crop in Khammam district." CCI would purchase the crop as per the fair average quality specifications fixed by the textile commissioner.

"CCI officials have advised farmers to bring the crop to the government yards only as we would not buy cotton sold outside the yards. Farmers should also avoid selling the crop at doorsteps. They should bring dry, clean and properly graded cotton to earn maximum rate. They should do away with the system of bringing the crop in jute bags. Instead they should bring the crop in loose form, which is followed by farmers all over the country," Singh said.

Meanwhile, farmers, industrialists and traders say the proposed textile park at Yadlapadu near Chilakaluripet would usher in a golden age in cotton cultivation. The state government has already identified a 100 acre land for the ambitious project.

The Centre and the state governments have promised loans, subsidies, and concessions in power supply, and taxes for ginning, spinning, weaving and pressing companies to encourage them to set up units in the park.

The mega project is expected to take off soon.