Cabinet approves Rs17,408.85 cr price support to Cotton Corp for 2014-15 to 2020-21
16 November 2021
The union cabinet has approved Rs17,408.85 crore as price support to the Cotton Corporation of India (CCI) for reimbursing losses under MSP operations for cotton during the cotton season (October to September) 2014-15 to 2020-21.
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has given its approval for committed price support of Rs17,408.85 crore to CCI in order to safeguard the interests of the cotton farmers.
The government felt it expedient to conduct price support operations in cotton years 2014-15 to 2020-21 as cotton prices touched the MSP prices. Price support operations help stabilise cotton prices and alleviate farmers’ distress. It also enhances the inclusiveness of the cotton farmers in the economic activity of the country.
Cotton is one of the most important cash crops of the country and plays a major role in sustaining livelihood of around 5.8 million cotton farmers and 40 to 50 million people engaged in related activities such as cotton processing and trade.
During cotton season 202-21, the area under cotton cultivation was 13.3 million hectares with estimated production of 36 million bales, which account for around 25 per cent of total global cotton production. Government of India, based on the recommendations of CACP, fixes MSP for seed cotton (kapas).
The government has appointed CCI as the central nodal agency with a mandate to undertake MSP in cotton by procuring all FAQ grade cotton from farmers without any quantitative celling, as and when cotton prices fall below MSP level. MSP operations protect cotton farmers from distress sale during any adverse price situation.
MSP operations being sovereign function in nature motivates cotton farmers in the country to keep their sustained interest in cotton cultivation so as to make India `Atambirbhar’ for quality cotton, which is the raw material for spinning industry. CCI keeps its infrastructure ready in all 11 major cotton growing states by opening 474 procurement centres in 143 districts.
During the global pandemic in the last two cotton seasons (2019-20 and 2020-21), CCI procured around a third of the cotton produced in the country, ie, about 20 million bales and disbursed more than Rs55,000 crore directly through the bank accounts of around 4 million farmers.
For the current cotton season, ie, 2021-022, CCI has already made all adequate arrangements in all 11 major cotton growing states, including deployment of manpower at more than 450 procurement centres, so as to meet any eventuality of MSP operations.