Govt approves Rs 17,409 crore support to CCI for cotton procurement

New Delhi, November 10

The government on Wednesday approved Rs 17,408.85 crore funding to the Cotton Corporation of India (CCI) which will be primarily utilised for repayment of bank loans taken by the state-owned firm for the procurement of cotton during the previous seven marketing years.

Cotton season or marketing year runs from October to September.

The Cabinet Committee on Economic Affairs (CCEA) approved the Minimum Support Price (MSP) funding of Rs 17,408 crore to CCI for cotton seasons 2014-15 to 2020-21 for direct support to farmers.

Briefing media on the Cabinet decisions, I&B Minister Anurag Thakur said the CCI and authorised agencies procured significant quantities of cotton in 2019-20 and 2020-21.

The annual production is estimated at 350-360 lakh bales.

During cotton season 2020-21, area under cotton cultivation was 133 lakh hectares with estimated production of 360 lakh bales, which account for around 25 per cent of total global cotton production. The Government of India, based on the recommendations of Commission for Agricultural Costs and Prices (CACP), fixes MSP for seed cotton (kapas).

Later, Textiles Secretary U P Singh said, “Cotton Corporation does procurement by availing a loan from bank on interest. Therefore, it has been decided in today’s Cabinet that Rs 17,408 crore will be given to CCI so that it can fully repay its loan”.

On cotton procurement for 2021-22, he said as of now the CCI does not see the need to purchase cotton as the prevailing market prices are higher than the minimum support price (MSP).

He said the losses incurred by the CCI on cotton procurement were earlier pegged at Rs 7,464 crore and Rs 9,412 crore in 2020-21 and 2019-20, respectively.

However, Singh added that the losses should be lower.

The Secretary said a provision for payment of nearly half the amount has been made in the current financial year’s revised expenditure through supplementary grants while the remaining half will be provided for in the Budget 2022.

“During the global pandemic in the last two cotton seasons (2019-20 & 2020-21), the CCI procured around 1/3rd of the cotton production in the country, i.e. about 200 lakh bales and disbursed more than Rs 55,000 crores directly in the bank account of around 40 lakh cotton farmers,” Singh said.

The government extends full price support to the CCI for undertaking MSP operations in cotton, the ministry said in a release.

For the current cotton season, the CCI has already made adequate arrangements in all 11 major cotton-growing states by opening 474 procurement centres in 143 districts, to meet any eventuality of MSP operations.

The procurement of cotton at MSP helped stabilise the cotton prices and alleviate farmer’s distress. In another decision, the Cabinet approved reservation norms for Jute Packaging Materials for Jute Year 2021-22.

As per the reservation norms, Thakur said, 100 per cent foodgrains and 20 per cent of sugar will be packed in jute bags during Jute Year 2021-22 under JPM Act, 1987.

The decision is likely to bring relief to 3,70,000 workers employed in jute mills and ancillary units. PTI