MSP help of ₹1718 crore: Big support to cotton farmers and textile industry: Atul Ganatra
Former President of Cotton Association of India, Atul Ganatra, in an exclusive interview to CNBC Awaaz, talked in detail about the government's funding of Rs 1718.56 crore and the condition of the cotton sector.
The government has approved MSP funding of Rs 1718.56 crore. This fund has been released to compensate the losses incurred by Cotton Corporation of India (CCI) during MSP procurement in the year 2023-24. However, the government does not see it as a loss, but as a help or subsidy given to the farmers.
About 60 lakh farmers cultivate cotton in India and most of the farmers get direct benefits of MSP. The MSP system not only benefits the farmers, but the textile industry also benefits by providing cotton at lower prices through CCI.
Having adequate stock with CCI provides security to the industry. This year CCI has purchased approximately 1.06 crore bales of cotton at MSP, which has provided stability to the textile industry. Due to the purchase of about 1.05 crore bales out of the total arrivals, farmers got a price around the MSP of Rs 8100 throughout the season, while in states like Maharashtra and Gujarat, prices even reached Rs 8500-8600 above the MSP.
MSP purchase maintains market stability, which benefits farmers. At the same time, when CCI sells cotton at a lower price, the industry gets a competitive advantage, which improves export and production activities. This is a positive step and the government should continue it. Another effect of this is that satisfaction among farmers has increased, due to which there is a possibility of 15-20% more cotton sowing next year.
At present the demand remains strong. Spinning mills are getting good margins of Rs 20-25 per kg on yarn. A good amount of yarn demand is also coming from China, and advance orders for April-May have already been booked. Due to this, the position of Mills remains profitable at present.
Talking about stock, there is adequate availability in the country. CCI has a stock of about 1 crore bales of cotton, while ginners and spinning mills also have a stock of about 3 months. On the one hand, cotton prices are relatively low and on the other hand, yarn prices are high, which creates favorable conditions for spinning mills. Also, mills are continuously purchasing cotton.
Suggestion:
This loss to CCI is ultimately compensated with taxpayers' money. Therefore, it is necessary that this cotton be preferentially reserved for the Indian textile industry and not sold to international traders. If this resource is used in domestic industry, it will provide long-term benefits to both farmers and industry.
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Team Sis
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