Major changes possible in cotton procurement policy: CAI recommends implementation of Bhavantar Yojana; government calls high-level meeting on November 19
New Delhi, November 14 (Agricultural Land Bureau): In view of significant changes in India's cotton market, the Cotton Association of India (CAI) has suggested to the government that the current MSP-based procurement model is no longer providing farmers with the expected benefits.
CAI says that if the government implements the Bhavantar Yojana, a premium of Rs 500 per quintal could be transferred directly to farmers' accounts. This model would provide equal benefits to cotton sold in different mandis across the country.
Currently, 200 lakh bales are sold through mandis, while implementing this scheme is estimated to cost Rs 1,700 crore, which is significantly less than the huge expenditure incurred under MSP.
Why is the MSP model becoming less effective?
CAI stated that ₹37,450 crore was spent on cotton procurement at MSP in 2024-25, but its benefits reached only 34% of farmers. The organization stated that there is a significant lack of information and awareness about MSP among farmers, leaving 75% unaware of the actual MSP rate. Most farmers lack technical understanding and market access, making the MSP system less effective over time. CAI states that under current circumstances, competition in the cotton market is declining and the MSP model is failing to provide adequate protection to farmers.
Increasing pressure on the industry and the impact of imports
According to CAI President Atul Ganatra, 4.5 million bales of cotton are expected to be imported this year, as cotton is available cheaper in the international market than in India. This is increasing pressure on the domestic industry, as the MSP requires them to purchase cotton at higher prices. Ganatra suggested that if CCI sells the purchased cotton, it should consider selling it at a price 5 to 7% lower than the MSP, providing relief to the industry and maintaining market balance.
Government calls important meeting on November 19th
The government has scheduled a high-level meeting at Udyog Bhawan on November 19th at 12:30 pm to discuss the current cotton procurement process, improvements to the MSP model, and suggestions made by CAI. The meeting will discuss in detail the possibilities of implementing the Bhavantar Yojana, the option of paying premiums to farmers through DBT, and other industry-related issues.
What is CAI's argument?
CAI believes that MSP is not an effective solution for cotton farmers in the changing market conditions, as only 10 to 15% of farmers receive the actual benefit of MSP. According to the organization, cotton procurement at MSP is neither providing adequate profits to farmers nor providing stability to the industry. CAI says that the government should involve farmers by implementing the Bhavantar Yojana, so that their income can increase directly and the market can become more competitive.
read more :- CCI Cuts Cotton Prices by ₹500, Sells Over 90% via E-Auctions
