The government today said it may extend a bailout package to the cotton industry to tackle huge input costs but firmly ruled out rolling back the "sharp hike" in cotton minimum support price (MSP).
"There is no question of taking it back (MSP). The farmers should get their due. But we will talk to the industry and see if we can do something.... Maybe a bailout package for them," Union Agriculture Secretary T Nanda Kumar told PTI on the sidelines of an exhibition here, organised by the Confederation of Indian Industry.
Kumar, however, refrained from commenting on the nature of the package.
The Centre had, in September, increased significantly the minimum support prices of standard cotton (long staple) to Rs 3,000 per quintal for 2008-09 from Rs 2,030 in the previous year. The MSP of medium staple cotton has been raised to Rs 2,500 from Rs 1,800 per quintal.
The industry has protested strongly against the MSP hike, saying domestic rates will skyrocket at a time when prices in global markets are declining. The move was termed by political analysts a farmer friendly move in the run-up to general elections next year.
The Confederation of Indian Textile Industry has already cautioned that the hike in MSP will prompt domestic traders and millers to scout for alternative avenues for importing cheaper cotton and exports may plunge by a half to about 50 lakh bales in 2008-09 from 100 lakh bales last year.
Some traders have started importing cheaper cotton from Pakistan. India is projected to produce at least 320 lakh bales of cotton in the 2008-09 season.
