The government plans to introduce the Direct Benefit Transfer scheme for cotton farmers and has increased the minimum support price for long staple cotton to Rs 4,100 for 2015-16 marketing season, Union Textiles Minister Santosh Kumar Gangwar said today.
"With the world cotton consumption slowing down and the demand for higher minimum support price for cotton emanating from some states, the Centre is planning to introduce the direct benefit transfer scheme for the cotton farmers as well," Gangwar said.
The minister inaugurated the 74th Plenary of the International Cotton Advisory Committee here.
"We have kept the cotton growers' interest in mind and increased the minimum support price for long staple cotton to Rs 4,100 for the 2015-16 marketing season," Gangwar said.
Cotton marketing season starts from November.
Textiles Secretary S K Panda said the new move would benefit farmers substantially.
A pilot project under the Direct Payment Deficiency System (DPDS) for paying MSP guarantee to the cotton farmers has been initiated in Maharashtra.
Under this system, farmers will directly get the amount which is the difference between the MSP and the market price, if the market price falls below the MSP.
"For availing of the benefit, farmers would have to present the proof of cotton sold at Agriculture Produce Market Committee yards, plus other papers such as ownership document, yield estimation and other details. If the pilot (project) is successful, the DPDS would be rolled out in all cotton growing regions," Gangwar said.
The cotton procurement through the traditional route of Cotton Corporation of India (CCI) has been subdued this season and is expected to be lower than last year due to firm prices, which are ruling above MSP.
In the 2014-15 marketing season that ended in October 2015, CCI procured a record 8.6 million bales of cotton across the country.
However, the International Cotton Advisory Committee has revised downward world cotton consumption, following a steep slowdown in China, which is the largest consumer of cotton.
Cotton consumption in China is expected to be 7.33 million tonne against 7.52 million tonne last year.
The cotton consumption in India is expected to go up by a modest 3 per cent from 5.4 million tons last year to 5.49 million tons this year.
Meanwhile, the Textiles Ministry has estimated cotton output in India to decline this year to 36.5 million bales, from 38 million bales last year. This is due to a fall in sowing area to 11.76 million hectares, from 13.08 million hectares last year. The yield, however, is actually estimated to rise significantly this year, to 527.49 kg a ha from 493.77 kg last year, on sowing of higher yielding seed.
"Despite the slowdown in China, India is expected to export 60 lakh bales of cotton this year as compared to 57 lakh bales last year," Cotton Association of India (CAI) president Dhiren Sheth said.
Due to low Chinese imports, India is looking at other countries for exports, he said.
Sheth said that Pakistan has already imported 10 lakh bales and Bangladesh will import 20 lakh bales this year. "Vietnam is also emerging a big importer of Indian cotton," he added.
