The Centre is planning to introduce Direct Payment Deficiency System (DPDS) to help the cotton farmers have better realisation of their produce when market rate rules below the minimum support price (MSP).
"We are planning to launch the pilot of DPDS during the current cotton season at Hinganghat in Wardha district of Maharashtra. Under this system, the farmers will directly get the difference amount between the MSP and market price, if it (the latter) is ruling below the MSP", Textile Commissioner of India Kavita Gupta told reporters here.
If the pilot is successful, the DPDS will be rolled out in all cotton-growing regions. The Agricultural Produce Marketing Corporation (APMC) price will be taken as the market price under the system, she said.
Earlier, the Government used to buy cotton by paying the MSP of Rs 3,750 per quintal and created artificial short supply in market. It also incurred huge cost on interest and storage of the procured stock.
Under the DPDS, the farmers have to submit documents like a copy of APMC receipt, land records and estimated farm yield to avail the benefit.
In the last season ended October 2015, the Cotton Corporation of India procured 17.60 lakh bales and Maharashtra State Cooperative Marketing Federation purchased 5.64 lakh bales, taking the total to 23.27 lakh bales, worth Rs 3,556 crore. The overall procurement across the country was 86 lakh bales.
Gupta said the cotton procurement this year is likely to be lower than last year due to firm prices, which are ruling above the MSP.
Despite a drought-like situation, cotton production in Maharashtra is expected to be at 80 lakh bales compared to 78 lakh bales in the last season.
"We have introduced high density technology in Vidarbha, which will help in improving the yield and also the total cotton output", Gupta added.
The yield in Maharashtra is expected to go up to 355.65 kg per hectare from 316.32 kg per hectare last year. The area under cotton cultivation has gone down to 38.24 lakh hectares from 41.92 lakh last year mainly due to weak prices.
Meanwhile, India will be hosting the International Cotton Advisory Committee Plenary Meeting in Mumbai from December 6-11 after a gap of 11 years.
The theme of 74th Plenary meeting is "From Farm to Fabric: The Many Faces of Cotton".
The meet, likely to be attended by 500 delegates from 50 nations, is of special significance for India in view of the role played by textiles sector in the economy, Gupta said.
