MSP will not be reviewed this season: Vaghela

The central government has borne a loss of Rs 200 crore this year to ensure that cotton farmers get a fair price for their crop, Union textiles minister Shankersinh Vaghela said in Ahmedabad on Tuesday.

However, it will not be possible to review the minimum support price this year. There is a long-drawn exercise involved in arriving at a new MSP, and it has to be cleared by the Cabinet, Vaghela said.

A delegation of farmers, the Khedut Mandal, met the textiles minister on Tuesday and demanded that the minimum support price of cotton be hiked to ensure that farmers get higher returns for their crop.

The minimum support price that the Cotton Corporation of India (CCI) is offering farmers is Rs 1960 per 100 kg of cotton.

Vaghela said there has been a 20 per cent increase in the production of cotton this year "" not only in India but across the world.

Last year, the cotton production in the country was 177 lakh bales, which increased to 213 lakh bales this year. Similarly, the worldwide production of cotton last year was 20.65 million tonnes, which has increased to 24.65 million tonnes this year.

The minister said that this year alone, the CCI has already purchased 10 lakh bales of cotton from all over the country, of which 1.75 lakh bales have been purchased from Gujarat. "CCI is in a position to purchase another 15 lakh to 20 lakh bales in the next month or so," the minister said.

He added that the CCI has purchased 10 lakh bales for about Rs 1000 crore, thus incurring a loss of around Rs 200 crore because of minimum support price operations.

In Gujarat, bales worth Rs 175 crore have been purchased, and the government has incurred a loss of around Rs 20 crore in the MSP operations. "We will continue to purchase cotton until the end of the season, to ensure that farmers get good prices for the crop," he said.

Interestingly, the CCI now does not require to intervene in the states of Punjab, Haryana and also in the Saurashtra area of Gujarat because cotton prices have gone above the MSP level.

"In either case, the CCI will open up a purchasing centre at any part of the country at a notice of 24 hours," the minister said.