Welcoming the cotton bonus announced by Gujarat government, the Southern India Mills' Association today pitched for implementing it through the Agriculture Produce Market Committee to ensure stability and smooth supply of cotton.
The Gujarat Government yesterday announced that farmers who sell their cotton produce to the Cotton Corporation of India (CCI) would be paid a bonus of Rs 110 per tonne on cotton in addition to the minimum support price of Rs 810.
Appealing to the Gujarat and central governments to allow AMPC to implement the bonus scheme, SIMA Chairman M Senthilkumar in a statement claimed that procurement by CCI would result in speculation, as it normally delayed the sale.
If the scheme was implemented through APMC, private ginners would immediately procure cotton and there will be a regular flow of supply in the market, he said.
CCI had been historically quoting higher price than the actual market price and commences sale only after a period of one or two months of procurement, he added.
Stating that the increasing trend in import of cotton yarn and fabrics has also affected the domestic market demand, he claimed that in this scenario, the implementation of cotton bonus system for the farmer in Gujarat through CCI had already inflated the cotton price by few hundred rupees.
Gujarat being the largest cotton growing state in the country, if the cycle of sale was disrupted, it would greatly affect the entire textile value chain, he said.
The entire knitting and garmenting sectors predominantly need Gujarat cotton and stability in prices coupled with timely continuous availability is a must to sustain the smooth functioning of knitting and garmenting sectors, Senthilkumar added.
