Cotton export ban: Hard-pressed farmers are in no position to hold cotton crop

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AHMEDABAD: The ban on cotton might be good for domestic mills, but it is not good news for farmers, at least for those with small landholdings.

While the ban doesn’t impact farmers with large farms and better yield (who are still looking at 30-40% net profit), it has affected farmers with smaller landholding and less yield per acre. A large number of farmers across Gujarat, Maharashtra and Andhra Pradesh have been holding the crop in anticipation of better prices.

“I have got cotton from my own field and neighbouring farms to sell in the market. The yield was 4-5 quintal an acre due to negligible water resources. I am hopeful prices will rise in the coming days,” said Raghavendra, a farmer from Khammam district in Andhra Pradesh with a three-acre landholding who sold the crop to Cotton Corporation of India ( CCI) at the minimum support price of Rs 3,300 a quintal.

Market yard officials say middlemen from villages were getting cotton to mandi after buying from farmers. “Over 60-70% of farmers currently selling cotton have landholdings of 2-5 acres. The crop quality is also not good,” said Guntur’s district assistant director (agriculture marketing) Venkateshwara Reddy. However, small farmers in Gujarat have been holding the crop in the hope that prices will firm up much the way it happened in the previous year.

“I sold two quintals of cotton for Rs 9,000 in December and am holding 30-50 quintal,” said Ramesh Chaganbhai, a farmer from Magra Kheda in Chotila taluka of Surendranangar district. The farmer, who is betting on cotton again, says everyone in his village is holding the crop on traders’ advice.

But farmers with large landholdings are adopting a wait and watch policy. “I will hold the crop for the next 15 days. If no decision on cotton export ban comes, I will sell cotton in lots of 40 quintal each,” said farmer Satish Rao from village Batsharavama near Adilabad town in Andhra Pradesh. “Compared to a net profit of 60-80% in the previous year, this year my net profit will be close to 40%,” said Rao who sowed cotton on a 100-acre land and got an yield of 30 quintal per acre even as the state average yield was 12 quintal per acre.

“My net profit will have been more had it not been for the increased expense of spraying pesticide to protect the crop from sucking pest. I have been selling cotton in the mandi as soon as picking has been completed,” said Surinder Ahuja, a farmer who grew cotton on 44 acres in Hissar with a 9.5 quintal per acre. The average price he got was Rs 4,200 a quintal. “If I keep cotton which has high moisture, it will discolour the crop. Also the weight of the crop will reduce. It is better to sell,” he said.

Meanwhile, the Confederation of Indian Textile Industry (CITI) welcomed the government’s decision to prohibit further cotton exports. The confederation had earlier reacted against such government intervention and suggested that market forces be allowed to play out.

“It has now come to its notice that speculative registration of cotton export contracts in large quantities has been resorted to by some traders and permitting exports against such contracts would have seriously affected the fibre security of the textile value chain,” CITI chairman SV Arumugam said.

Source: http://economictimes.indiatimes.com/markets/commodities/cotton-export-ban-hard-pressed-farmers-are-in-no-position-to-hold-cotton-crop/articleshow/12181839.cms

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