Maharashtra may revamp cotton policy

Rs 2000 cr losses incurred on account of cotton monopoly procurement scheme

A mid-course correction of the Maharashtra government's cotton policy is on the cards in the wake of the Rs 2000 crore losses that will be suffered by the state under the cotton monopoly procurement scheme (CMPS).

Maharashtra's marketing minister Harshvardhan Patil said: "This year the net loss of Rs 2000 crore will have to be borne by the state on account of cotton procurement. In comparison, the total accumulated loss in the last 30 years is pegged at Rs 4850 crore."

Patil added that the cotton budget for this fiscal is pegged at Rs 4500 crore. "This is while we have only been able to raise Rs 1600 crore so far. Rs 1000 crore has been raised from the Maharashtra State Cooperative Bank (MSCB), Rs 200 crore from district central cooperative banks (DCCBs) and Rs 460 crore was budgeted by the state government."

Patil said he would soon convene an all party meeting to discuss the CMPS. The state government has undertaken to purchase the cotton produce of agriculturists (mostly in the Marathwada and Vidarbha regions) at a rate of Rs 2500 per quintal while the minimum support price fixed by the Union government is Rs 1960 per quintal.

As a result of the state government announcement, cotton farmers have made a beeline for cotton procurement centres to avail of the higher rate, even as prices of cotton have fallen.

A bumper crop of the commodity has added to the problem of plentiful cotton being produced in the state this year. "The rampant use of BT cotton has resulted in an increase in production in the state to 15- 20 quintals per hectare compared with 7-10 quintals produced earlier," Patil said.

Chief secretary Prem Kumar also hinted at a rethink on the CMPS. "A mid-course correction is due in the wake of the current situation," he said.

The state finance department is also engaged in discussions with the MSCB to reduce the 13 per cent interest being charged for funds raised for purchasing cotton. The government wants MSCB to concede to a more reasonable rate of nine per cent, according to finance department officials.