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Cotton farmers groping in dark for proper guidance

Cotton growers in the country seem to be groping in the dark about the likely demand-supply position of this fibre in the recently started season as the authorities concerned have failed to provide them the necessary guidance.

The Union government, no doubt, expresses its occasional concern for the farming community, but it has also failed to ask the authorities concerned as to why they have been unble to issue in time the demand-supply estimates for this fibre in the new season. Under this situation, cotton growers are naturally bewildered by the wide varying estimates being tossed up by diverse groups.

In order to get reliable information about the demand-supply position of cotton in the country, the Union textile minister has, no doubt constituted the Cotton Advisory Board to get from it such information on a continuing basis in order to take appropriate policy decisions, it seems to have abdicated its further responsibility to see whether the object behind the creation of such a body is being met or not.

The last meeting of the Cotton Advisory Board was held as far back as in June 27, 2003. Soon thereafter the board has been in hibernation. It has surprisingly not considered it necessary to shake off its sloth and to provide in time such information to the cotton farming community in the country. When international agencies like the US Agricultural Department as well as the International Cotton Advisory Committee are able to give out the demand-supply estimate of cotton for the whole world including India long before the start of the new season, the inability of the Indian authorities to do so even for the country, may indicate their unpardonable indifference if not incompetence. They can remain indifferent to their obligation in this regard as no one questions them on this matter and no question is being raised even in Parliament about the failure of the Cotton Advisory Board to discharge its function sincerely and in time. Surprisingly, none of even independent members of the Cotton Advisory Board have thought it necessary to write to the authorities concerned to convene an urgent meeting of the board. All this has thrown domestic cotton growers in utter confusion.

On the one hand, for instance, the agriculture ministry has in its first advance estimates of kharif crop in the country indicated a few days ago that the country might produce about 131.2 lakh bales of 170 kg each this season. However, the agriculture ministry’s cotton crop estimates are never taken seriously by any one either in the country or abroad. International agencies consign our agriculture ministry’s estimates to the waste paper basket.

The International Cotton Advisory Committee has in its global estimates for the demand-supply position of cotton, indicated that the Indian cotton crop might be of the order of 26.8 lakh tonnes (about 157.64 lakh bales of 170 kg each).

Cotton trade circles, on the other hand seem to have by and large inclined to place their crop estimate around 165 lakh bales of 170 kg each. Some optimists among them are, however, inclined to place their estimates around 175-180 lakh bales.

The confusion in which the Indian cotton farmer consequently finds himself today is easily understandable. If the crop is to be around say 157.64 lakh bales as predicted by the International Cotton Advisory Committee, the demand-supply position of this fibre might remain tight and its prices might move up from the present levels. The farmer can benefit by refusing to part with his produce for some time. On the other hand if the crop is going to be of the order of 175-180 lakh bales, the demand supply position may remain easy and prices might get depressed.

Unfortunately, the Union government has been unable to set up as in some foreign countries, corporation with whom the farmers can place their produce and get against such pledge, some funds to meet their immediate requirements. As Indian farmers do not have such option, growers of cotton and other agriculture produce are forced to rush to the market to dispose of their produce. In order to take advantage of the farmers’ weak position, intermediates are often tempted to give out inflated estimates of crop to frighten farmers and make them part with their crop as early as possible. This may be understandable if the private interests do so, but in our country even the state constituted agency, like the Cotton Advisory Board, is said to be often indulging in such anti farmer activities. For instance, last season despite severe drought condition in various parts of the country, it had given out a highly inflated cotton crop estimate of 152 lakh bales at the start of the season and after farmer had parted with their produce, the crop estimate was gradually brought down by to just 136 lakh bales. As a result, cotton farmers in the country lost crores of rupees, and not a blade of grass moved in New Delhi.

As for the current season which has begun with an opening stock of about 24 lakh bales, the total supply of this natural fibre might come to about 181.64 lakh bales, if one goes by the ICAC estimate, placing production at 157.64 lakh bales. The CAB had earlier placed the last season’s domestic consumption at 167 lakh bales. Even if there is no increase in the domestic offtake of cotton this season, the end-season stock might fall as low as 14.64 lakh bales. The possibility of such a scenario, might imply very tight demand-supply position of cotton during the season. If the crop does not go beyond 170 lakh bales, such a situation cannot be avoided. Of course imports can be made to ease the supply position, but nowhere cotton may be cheap during the season.

– M D Dewani