By admin       2019-02-19

MUMBAI – Despite the sharp 26% hike in minimum support price for cotton in the ongoing season hitting the textile industry to some extent, traders and government agencies have recommended a further 10-15% increase in support price for 2019-20 (Oct-Sep), to ensure farmers don't shift to other crops.In a meeting convened by the Commission on Agricultural Costs and Prices at the beginning of this month, the Maharashtra unit of the agency recommended a 15% increase in the intervention price, according to Chairman Pasha Patel."Our sample survey from 279 cotton-growing areas in the state found at least 15% increase in cost of production," Patel told Cogencis on the sidelines of an event to launch cotton futures on BSE.In Maharashtra, cotton and soybean are the only two competing crops during the kharif season. If the recent slump in cotton prices continues, despite the fall in output, there is a possibility of shift in acreage to the more lucrative soybean, which is trading at least 12-15% above its support price. This can be prevented by raising the minimum support price of cotton, Patel said.The Cotton Association of India has recommended a 10% increase in support price for 2019-20. However, the association has also urged a strong linkage of price with quality, and called for stricter implementation of quality parameters during intervention programmes."We have recommended connecting the MSP to quality and a mechanism to incentivise better-quality cotton suitably," said Manish Daga of Cottonguru, who represented the Cotton Association of India at the meeting.Indian cotton has lost its bargaining power in the international market in the last few years, and more often than not, it is sold at a discount because of poor quality of the crop due to contamination or adulteration or both, said a member of the association.The Indian Council of Agricultural Research, under the farm ministry, also agrees with the industry's view of an increase in support price and the need for stricter adherence to quality norms during procurement operations, said an official at the Central Institute of Cotton Research.State-owned Cotton Corp of India is likely to have recommended even a bigger hike, a trade source said.Cotton sowing normally starts late April in irrigated areas of north India, while in rain-fed regions of the country, it starts in June.

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