The National Agricultural Cooperative Marketing Federation of India (Nafed) has urged the government to release more funds for procurement of additional cotton at the minimum support price (MSP) this season.
“We have procured 30 lakh quintals of raw cotton at an expenditure of Rs 900 crore as of December 17. It is insufficient given the record output estimates this year. The remaining Rs 700 crore from the total allocation of Rs 1,600 crore has been kept for pulses and oilseeds, which are yet to hit the market soon,” said U K S Chauhan, managing director of Nafed on the sidelines of the cotton contract launch by the National Spot Exchange (NSEL) on Saturday in Mumbai.
When asked about the amount Nafed has asked for, Chauhan said, “The government has to decide how much cotton we should buy. Any additional fund would be allocated only to cotton and nothing else.”
Meanwhile, the agency has already procured sunflowerseed worth Rs 27 crore so far this year.
During the last cotton season (October-September), Nafed had procured 30 lakh quintals. But, procurement pressure intensified this year because of record domestic production and a hefty raise in the MSP.
The government-nominated grain procurement agency buys agricultural commodities at MSP to assure confidence in the government system whereby farmers are assured of getting fixed price for their produce. The agency sells procured commodities when prices move up. In case of cotton, Nafed hopes to start offloading in February-March when inherently price rises on sustained mill demand.
Nafed is also planning to expand procurement in Gujarat, Karnataka and Punjab through its own network or engaging state federations, co-operative societies etc.
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When asked, Chauhan said that it does not intend to appoint private agency to procure commodities on its behalf.
India’s cotton output is estimated at 322 lakh bales (170 kgs each) during 2008-09 season. The country constitutes about 70 per cent of cotton production while the rest is exported.