Modi Government’s Higher Purchase Through MSP Scheme Helps Cotton Prices Gain; Punjab Share 70 Per Cent In Paddy Procurement

The Narendra Modi government has increased the pace of its procurement operations under the minimum support price (MSP) by focussing on other crops too besides paddy.

In particular, it has increased the procurement of cotton under MSP in five of the growing states.

According to a Press Information Bureau (PIB) release, procurement of raw cotton (kapas) is on now in Punjab, Haryana, Rajasthan, Madhya Pradesh and Telangana.

The Cotton Corporation of India (CCI) procures cotton on behalf of the Union government and so far, it has procured 6.38 lakh bales (each 170 kg) at a cost of Rs 1,845.62 crore, benefitting 1.20 lakh cotton growers.

Higher procurement of cotton by CCI is considered essential this year since prices are ruling below in view of huge carryover stocks of over 110 lakh bales. On top of this, India could be producing around at least 350 lakh bales of cotton this year.

A clear situation on cotton production will likely be known this week with trade body Cotton Association of India set to come out with its estimate.

The procurement operations under MSP has helped cotton prices recover to around Rs 5,200 a quintal currently against about Rs 4,500 a fortnight ago.

The CCI has said that it would procure 125 lakh bales at the MSP of Rs 5,825 a quintal.

Trade sources said that CCI is expected to procure in Gujarat and Maharashtra from this month-end and it would help the natural fibre prices to stabilise around the MSP.

With exports also turning competitive, cotton prices could touch the MSP level in a couple of months time, according to trade sources.

Paddy has been procured in Punjab, Haryana, Uttar Pradesh, Uttarakhand, Tamil Nadu, Chandigarh, Jammu and Kashmir, Kerala and Gujarat.

Of the total 21.05 mt procured so far, the major contribution of 14.8 mt has come from Punjab, making up over 70 per cent, according to the PIB release.

Paddy procurement has benefitted 1.77 million farmers with the Centre spending nearly Rs 40,000 crore on it.

Apart from these, the Modi government has approved purchase of 4.5 mt of pulses and oilseeds in nine states, besides sanctioning procurement of 1.23 lakh tonnes of copra in southern states.

This has helped nodal agencies, nominated to make MSP procurement, procure 10,500 tonnes of moong, urad, groundnut and soybean. A sum of Rs 57.83 crore has been spent on these procurement benefitting over 6,600 farmers.

Over 5,000 tonnes of copra have also been procured at a cost of Rs 52.40 crore aiding nearly 4,000 growers.

The PIB release said prices of both urad and copra are ruling above MSP currently.

The increased procurement comes on the heels of protests against the agricultural reforms brought by the central government, with the opposition Congress and states ruled by it opposing them.

That Punjab’s share in the total paddy procurement is 70 per cent now to an extent calls the bluff of the Congress and its Punjab government headed by Capt Amarinder Singh.

One of the campaigns launched against the agricultural reforms by the Congress and other opposition parties is that it would end in the MSP operations being discontinued.