India: Textile Ministry chalks out plan to improve cotton export potential

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The ministry of textiles in coordination with department of agriculture has started a review of the crop related and other ancillary measures to improve the crop yield.

According to official sources, since cotton as a crop and cotton yarn has great export potential, special impetus has to be put. In fact the government is employing several measures to improve both productivity and quality of all cash crops with high potential for revenue generation like jute, rubber etc.

It is proposed to put a restriction on cotton seed varieties for homogenizing the fibre quality and containing the cost of the farmers.

“Any new developments in seed technology should be adopted by process of replacement and not by addition”, said a source. According to him, every year, seed companies come up with new varieties with slight modification to the existing varieties and price them very high.

Through this methodology of replacement and not addition, firstly, the pricing may be reasonable as the company has less price segments to cash on. Secondly, the farmers will not be confused and the crop will not be very diverse quality which makes it difficult to market.

Secondly, the role of Cotton Corporation of India may be changed from merely carrying our MSP operations to commercial sell and purchase as a business trading house, similar to that of star trading houses in gold and silver. Officials clarified that operations relating to sale to industry on commercial lines will be at arm’s length to the operations pertaining to MSP.

Further, a system of third party cotton certification system at ginning level should be implemented to standardize and benchmark cotton so that units following good practices and packing standard quality get better prices.

Similarly, the role of Cotton Advisory Board (CAB) is also proposed to be changed from finalization of balance sheet of cotton production, consumption and stocks to advisory body for use of seed, farming practices, research and development apart from finalizing the cotton balance sheet.

It is also proposed to expand the scope of minimum support prices (MSP) operations from only two varieties currently to all five types of cotton varieties that is short staple, medium, medium long, long and extra?long staple length. This is to help the cotton farmers to realize fair price for their high quality produce across varieties.

Moreover, the ministry proposes to pursue a liberal trading regime for cotton fibre as well as cotton yarn with no restriction on exports or imports.

This follows the mismanagement in 2010-2011 when restrictions were placed on cotton exports briefly to ensure fibre availability for Indian spinners.

Since India is the second largest producer as well as exporter of cotton, the decision resulted in global demand?supply gap increasing fibre and yarn prices in an unbalanced manner, said sources.

– Business Standard

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