Lok Sabha Question No. 4691 (UNSTARRED), answered on 2017-03-30
Subject: Subsidy to Cotton Farmers
Ministry: TEXTILES
Asked by: M. UDHAYAKUMAR

## LOK SABHA UNSTARRED QUESTION NO. 4691 TO BE ANSWERED ON 30.03.2017

## SUBSIDY TO COTTON FARMERS

## 4691.   ADV. M. UDHAYAKUMAR:

## Will the Minister of TEXTILES

be pleased to state:

- (a) whether  the  Government's  plan  to  start  transferring  subsidy  directly  to  cotton farmers through a pilot project without having to procure the fibre through State run agencies is unlikely to materialize, and if so, the details thereof;
- (b) whether the market prices are expected to stay above the State fixed benchmark rates and if so, the details thereof;
- (c) whether the cotton prices have been mostly higher than the Minimum Support Price (MSP) since the beginning of 2015-16; and
- (d) if so, the details thereof?

## ANSWER

## ( अज )

## MINISTER OF STATE FOR TEXTILES (SHRI AJAY TAMTA)

(a): Yes, Madam.  The Government of India through Government of Maharashtra made a  proposal  to  implement  direct  transfer  of  funds  to  the  accounts  of  cotton  farmers  in  the cotton  season  2015-16  through  the  Maharashtra  State  Co-operative  Cotton  Growers Marketing  Federation  Ltd.  (MSCCGMFL)  in  Wardha  district  of  Maharashtra  on  a  pilot basis. Since most of the time, the market price of cotton had remained above the Minimum Support Prices (MSP), this was redundant during 2015-16.

(b): Ministry of Agriculture. Government of India based on the recommendations of its Advisory  Board  viz.,  Commission  for  Agricultural  Costs  and  Prices  (CACP)  fixes  the Minimum  Support  Price  (MSP)  for  two  basic  staple  groups  of  cotton  i.e.  medium  long staple and long staple variety.  Since beginning of the current cotton season 2016-17, kapas prices are ruling much above MSP level in all the cotton growing States. Presently, kapas prices are ruling above the MSP level by 30% to 50%. Statement showing average kapas prices of major cotton varieties during cotton season 2016-17 are as follows:-

*Upto 23 rd March 2017

|        | J-34                                      | H-4/MECH-1                                | S-6                                       | Bunny Brahma                              | DCH-32                                    |
|--------|-------------------------------------------|-------------------------------------------|-------------------------------------------|-------------------------------------------|-------------------------------------------|
| Month  | MSP in Rs./Qntl                           | MSP in Rs./Qntl                           | MSP in Rs./Qntl                           | MSP in Rs./Qntl                           | MSP in Rs./Qntl                           |
|        | 4010                                      | 4060                                      | 4110                                      | 4160                                      | 4560                                      |
|        | Average Market Price of Kapas in Rs./Qntl | Average Market Price of Kapas in Rs./Qntl | Average Market Price of Kapas in Rs./Qntl | Average Market Price of Kapas in Rs./Qntl | Average Market Price of Kapas in Rs./Qntl |
| Oct.   | 5098                                      | 5335                                      | 4623                                      | 5331                                      | 5602                                      |
| Nov.   | 5204                                      | 5091                                      | 4703                                      | 5162                                      | 5835                                      |
| Dec.   | 5197                                      | 5127                                      | 4854                                      | 5209                                      | 6280                                      |
| Jan.   | 5722                                      | 5623                                      | 5275                                      | 5636                                      | 6461                                      |
| Feb.   | 5936                                      | 5773                                      | 5418                                      | 5885                                      | 6487                                      |
| March* | 6040                                      | 5639                                      | 5820                                      | 5440                                      | 6403                                      |

(c) & (d): Yes,  Madam.    During  cotton  season  2015-16,  market  price  of  raw  cotton (kapas)  were ruling much above MSP level except  for a few parts of Telangana, Andhra Pradesh,  Maharashtra  &  Gujarat  where  kapas  prices  touched  the  MSP  level  for  a  short period of time i.e. during November & December 2015. As a result, CCI could purchase kapas equivalent to 8.44 lakh bales under MSP Operations. Out of total MSP purchases by CCI,  around  75%  purchases  were  in  Southern  zone  particularly  in  Telangana  &  Andhra Pradesh  and  the  remaining  25%  in  Central  zone.    Monthly  average  kapas  prices  during cotton season 2015-16 are as under which shows that cotton prices had mostly been higher than the MSP's since the beginning of 2015-16:-

|       | J-34                    | H-4/MECH-1              | S-6                     | Bunny Brahma            | DCH-32                  |
|-------|-------------------------|-------------------------|-------------------------|-------------------------|-------------------------|
| Month | MSP in Rs/Qntls.        | MSP in Rs/Qntls.        | MSP in Rs/Qntls.        | MSP in Rs/Qntls.        | MSP in Rs/Qntls.        |
|       | 3950                    | 4000                    | 4050                    | 4100                    | 4500                    |
|       | Market rate in Rs/Qntls | Market rate in Rs/Qntls | Market rate in Rs/Qntls | Market rate in Rs/Qntls | Market rate in Rs/Qntls |
| Oct   | 4566                    | 4168                    | 4418                    | 4058                    | 5118                    |
| Nov   | 4415                    | 4066                    | 4298                    | 4098                    | 5209                    |
| Dec   | 4467                    | 4250                    | 4596                    | 4110                    | 5374                    |
| Jan   | 4738                    | 4543                    | 4766                    | 4227                    | 5355                    |
| Feb   | 4724                    | 4444                    | 4669                    | 4145                    | 5270                    |
| Mar   | 4698                    | 4432                    | 4684                    | 4196                    | 5006                    |
| April | -                       | 4598                    | 4804                    | 4512                    | -                       |
| May   | -                       | 4679                    | 5001                    | 4828                    | -                       |
| June  | -                       | 4886                    | 5618                    | 5150                    | -                       |
| July  | -                       | -                       | -                       | -                       | -                       |
| Aug   | -                       | -                       | -                       | -                       | -                       |
| Sept  | -                       | -                       | -                       | -                       | -                       |