Caught between a falling price and a rising cost of production, cotton growers in Maharashtra have made a strong pitch for a subsidy, either from the central or state government
The trigger was procurement through the Maharashtra State Cooperative Cotton Growers Marketing Federation at the minimum support price (MSP) of Rs 3,900 a quintal announced by the central government. However, growers say, the cost of production is Rs 5,000-5,500 a qtl.
Cutting across party lines, members from both the ruling Congress-NCP coalition and the opposition Shiv Sena-BJP-MNS had, during the recently concluded winter session of the state legislature, strongly demanded a higher price for cotton growers. They recalled the price had zoomed to Rs 7,000 a qtl three years earlier, following a spurt in demand from China. They have called for procurement at Rs 6,000 a qtl.
Besides, growers want the state government to immediately stop the buying, legally impermissible, by traders and ginners of cotton at prices ranging between Rs 4,000 and Rs 6,000 a qtl from neighbouring Andhra Pradesh and Gujarat. The Cotton Advisory Board in October had projected an all-India production of 33.4 million bales (a bale is 170 kg) during the 2012-13 season, of which Maharashtra’s output was expected to be eight million bales. However, officials at the state agriculture department and the Federation estimate lower output, due to inadequate rainfall.
N P Hirani, chairman of the Federation, told Business Standard: “So far, we have procured merely 4,320 quintals at Rs 3,900 a qtl. Cotton Corporation of India’s procurement till date has been 11,509 quintals. Growers are facing a genuine problem of a rising gap between the cost of production and MSP, and they are unable to bear it. The per-acre cost of production is Rs 5,000 to Rs 5,500 a qtl, while they are getting a mere Rs 3,900 a qtl.” He recalled a subsidy was given to farmers in distress two years earlier.
Hirani said the Federation was not against farmers getting a higher price from private traders and ginning and pressing mills from Andhra and Gujarat. “But it is a totally ‘number two’ transaction. The government is also losing VAT (value added tax) and this is also affecting the operations of the oil industry in the state. Therefore, the state government will have to urgently intervene and stop such procurement,” he said.