At present, the minimum support price (MSP) of cotton is between Rs 2800-3,300 per quintal depending on staple length.
According to a highly placed source, “The Commerce Minister has written to Pawar for revisiting the modalities of MSP of cotton for the current season (October-September).”
On March 12, a delegation of MPs from cotton producing states like Maharashtra and Gujarat had met Sharma demanding a hike in in the MSP.
Earlier this month the government had banned cotton exports, which has since been partially revoked. High cotton prices overseas has encouraged farmers to export, leading to a tight supply situation which in turn has hit the domestic textile industry.
A hike in MSP is sought to discourage exports and augment domestic supply.
The Agriculture Ministry fixes the MSP of major farm commodities based on the recommendation of the Commission for Agriculture Costs and Prices (CACP).
The CACP is a statutory body and advises the government on the pricing policy for major farm produce.
The country’s cotton production is expected to be a record 34 million bales (of 170 kg each) in the 2011-12 crop year (July-June).