Govt weighs sops for cotton sector

CHANDIGARH: The Centre is considering a bailout package to the cotton industry to tackle huge input costs. ���There is no question of taking MSP (minimum support price) back. The farmers should get their due. But we will talk to the industry and see if we can do something... Maybe a bailout package for them,��� agriculture secretary T Nanda Kumar. The top farm official is in the city to attend an exhibition here, organised by the Confederation of Indian Industry (CII).

Mr Kumar, however, refrained from commenting on the nature of the package. The government had, in September, increased the MSP of standard cotton (long staple) to Rs 3,000 per quintal for 2008-09 from Rs 2,030. The MSP of medium staple cotton has been raised to Rs 2,500 from Rs 1,800 per quintal.

The industry has protested against the MSP hike, saying domestic rates will skyrocket at a time when prices in global markets are declining. The move was termed by political analysts a farmer-friendly move in the run-up to general elections next year.

The Confederation of Indian Textile Industry has already cautioned that the hike in MSP will prompt domestic traders and millers to scout for alternate avenues for importing cheaper cotton and exports may plunge by a half to about 50 lakh bales in 2008-09 from 100 lakh bales last year. Some traders have started importing cheaper cotton from Pakistan. India is projected to produce at least 320 lakh bales of cotton in the 2008-09 season.