The Karnataka government has announced a market intervention package of Rs 5 crore to help silk growers. The growers have been facing a sharp drop in the prices of silk cocoons from March this year. Last week, the cocoon prices dropped to a low of Rs 60 per kg from Rs 160 per kg earlier this year, showing a decline of 62.5 per cent.
“The government has decided to intervene in the silk market immediately as the farmers are facing a severe crisis owing to the price crash last week. We will pay a support price of Rs 30 per kg as and when the silk prices dip below Rs 160 per kg. We have already released Rs 5 crore for the purpose and additional funds will be released depending on the severity of the situation,” B N Bachegowda, minister for sericulture and labour, told reporters. He said the market intervention scheme has come into effect with November 1, 2011. Already, the government has released Rs 12 crore to Silk Marketing Board to stabilize the prices. Apart from this, the government has also given a guarantee for raising a fund of Rs 25 crore from the commercial banks. For the second time this year, the prices of silk cocoons crashed last week in major markets of the state like Ramanagar. Earlier, in March this year, the prices had crashed in the state after the Union finance minister Pranab Mukherjee reduced the import duty on silk from 30 per cent to 5 per cent in his budget proposals for 2011-12.
As a result of this, the prices of silk cocoons witnessed a drastic fall of around 57 per cent to Rs 150 per kg from a high of Rs 350 per kg last year. The reelers had found it cheaper to import silk than buying it from growers in Karnataka.
Subsequently, the then chief minister of Karnataka had led a delegation to prime minister, finance minister and textile ministers urging them to come to the help of Karnataka farmers by maintaining the 30 per cent import duty on silk.
However, the Central government has not yet reversed its budget proposal.
Karnataka accounts for 50 per cent of the country’s total raw silk production. The state produces 55,000 tonnes of cocoons and 8,000 tonnes of raw silk annually out of the total production of 19,000 tonnes per annum. The demand for silk in India is estimated at 25,000 tonnes. About 6,000 tonnes are imported from China by the reelers.
About 126,000 farmers in about 10,795 villages are engaged in the cultivation of mulberry in the state.