The cotton industry is likely to face an acute shortage of seeds this season. The availability of seeds is likely to remain between 34 and 35 million units, against an estimated demand of 45 million units.
The shortage comes at a time when the area under the seed has covered 90 per cent and farmers realised record price of their produce in the 2010-11 season (October - September).
“This year is the beginning of seed shortage that is likely to become severe next year, as companies have reduced their seed germination capacity in order to minimise losses,” said Harish Reddy, secretary of National Seed Association of India (NSAI), the organisation representing the Indian seed industry.
The shortfall may lead to black marketing of sapling, entry of spurious seeds into the market and premium on existing seeds. Hence, the impact of the last year’s crop loss due to unseasonal rainfall and shortage of land availability is set to leave a major impact on the commercial crop this year.
First round of seed flowers were heavily damaged due to unseasonal rainfall in November. Unfortunately, the germination was badly hit in the second round also due to acute labour shortage. Hence, overall seed supply is likely to decline marginally this year. But, impact would be severe next year as many seed producing companies have evinced interest in cutting seed output this year.
India is the world’s most competitive market for cotton seeds. There are over 500 varieties of hybrid cotton seeds from over 30 companies in the market with six approved insect protection Bt technologies. In addition, farmers also have the choice of open pollinated varietal seeds.
Data compiled by the Ministry of Textiles show that sowing area under Bt was recorded at 9.85 million hectares out of the total acreage area of 11.1 million hectares in the cotton year 2010-11. Rising prices of the cash crop were estimated to lure farmers to bring more area under cotton this year as well. The major shift was expected from other cash crops like oilseeds and pulses, said A B Joshi, textile commissioner.
The country requires around 12,500 tonnes of hybrid cotton seed to cover the current area while any additional area will require further increase in seed availability.
Until last year, supply was quite adequate. But, producing seeds since 2006 has gradually become a big challenge for companies due to the state governments’ price determination. In many states, state government fixes prices of hybrid seed variety which affects the pricing badly. Despite cotton prices almost trebled since 2006, seed prices declined.
The commonly used variety of seed is on Monday selling at Rs 650 a kg as compared to Rs 750 a kg four years ago. Commercial cotton crop, benefiting farmers, surged to Rs 6,500 a quintal from Rs 2,000 a quintal four years ago.
“Seed production is a labour-intensive work. Every male flower manually needs to be taken to female flower of Bt seeds for injecting ballroom resistant technology,” said Dr Paresh Verma, member - governing council, NSAI.
Labour consists of around 65 per cent of seed price in India. Therefore, rising labour cost is another area where the government must look into. Workers were available at Rs 50 per day in 2006. But, even at Rs 180 per day, workers are not available due to opening up of more earning avenues, he added.
Seed production is directly linked to the final commodity price. In the last four years, the government quadrupled minimum support price of cotton debarring, thereby, only seed producers from such benefits. The industry knows that the economics of farmers should be better than that of seed companies. But, seed companies should also get a part of current cotton price rise, a seed trader said.
Farmers’ interest have gradually diminished towards seed production as commercial crop looks attractive. “We met the Maharashtra chief minister to urge for market-linked seed prices, Raju Barwale, managing director of Maharashtra Hybrid Company (Mahyco).
Land used for growing seeds cannot be used for commercial crops. Experts believe that farmers can, however, shift to conventional crop which would lead to high production cost due to use of pesticides.
