CCEA okays extra funds to reimburse losses on cotton sale

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NEW DELHI: The government today approved additional financial support to reimburse “anticipated losses” in disposal of cotton being procured by the Cotton Corporation of India (CCI) during 2014-15.

The Cabinet Committee on Economic Affairs(CCEA), in its meeting held today, allowed the Maharashtra State Co-operative Cotton Growers Marketing Federation Ltd (MSCCGMFL) to procure cotton as a sub-agent of the CCI.

CCI is the government’s nodal agency for procurement of cotton at the minimum support price (MSP). Cotton MSP was fixed at Rs 3,750 per quintal for medium staple and Rs 4,050 per quintal for long staple for the year 2014-15.

The government said this decision would help in price support operations of 110 lakh bales in the current 2014-15 cotton season to help stabilise cotton prices and alleviate farmer distress.

The CCEA “took notice on the present cotton scenario in the country”, an official statement said.

It gave its ex-post facto approval for engaging the MSCCGMFL to undertake MSP operations as a sub-agent of the CCI during the cotton season 2014-15 (October-September).

“The CCEA further approved additional fiscal allocation under non-plan grant to meet anticipated losses in disposal of cotton for reimbursing the losses to CCI and MSCCGMFL on sale of cotton procured under the MSP operations during the cotton season 2014-15,” the statement said.

The MSP operation is primarily aimed at safeguarding the interest of the farmers and avoiding any distress sale.

MSCCGMFL will procure cotton from farmers in Maharashtra, in addition to CCI, on the same lines as CCI is doing.

In the past, MSCCGMFL has procured cotton under MSP as the agent of National Agricultural Federation (NAFED) in the State of Maharashtra on the basis of agreement between NAFED and MSCCGMFL.

The Cotton Advisory Board has pegged the country’s total cotton production at over 40 million bales in 2014-15 marketing year as against 39.8 million bales in 2013-14.

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