No extra incentives for cotton growers

MUMBAI: More than 950 suicides in the cotton-rich Vidarbha region since June ’05 have not prompted a populist intervention by the government of Maharashtra in cotton procurement. The state cabinet on Monday decided to procure cotton from farmers but at a minimum support price (MSP) fixed by the Centre.

This means the Maharashtra cotton growers’ co-operative marketing federation, a government agency, would purchase the crop at a bare price of Rs 1,900 per quintal, without any populist monetary incentives like bonus. Before ’04, the government used to pay an advance bonus of around Rs 500 per quintal in addition to the MSP. In ’04, however, the Vilasrao Deshmukh government discontinued the practice and has not resumed it.

Mr Deshmukh said the government has estimated procurement of 10m quintals in the initial phase at the cost of Rs 1,285 crore. “The government will have to draw loan from lending institutions and banks. The government will stand guarantee for this loan and make available margin money of Rs 320 crore as well,” Mr Deshmukh said.