New Delhi: Nearly one-fourth of Maharashtra’s cotton produce worth Rs 5,500 crore is still unsold as the nationwide lockdown and unseasonal rains have hit the procurement season which typically ends by April.
Several farmers in the Vidarbha region of Maharashtra, the main cultivation zone for the crop in the state, told ThePrint that they are struggling to sell their produce after the lockdown was imposed on 25 March to contain the spread of Covid-19.
Some are even selling at much lower prices than the minimum support price (MSP).
“Even though most of the harvest was completed by January, the procurement of cotton began only after 25 April in my village. Still, there are 80 quintals of cotton kappa (raw cotton) lying in my farmland,” said Mahadev Khamkar, a farmer with 10 acres of land in Amanatpur village of Akola district.
“With unseasonal rains and upcoming monsoon, farmers are panicking after being unable to sell their crop,” added Khamkar.
Anantrao Deshmukh, a member of Maharashtra State Cotton Growers’ Marketing Federation (MSCGMF) said around 25 per cent of cotton in Maharashtra is waiting to be sold due to the lockdown.
“The expected production of cotton in Maharashtra was supposed to be 400-500 lakh quintals this year (2019-20), but around 100 lakh quintals are yet to be sold. As per the average of 50 quintal per farmer, and with around 2 lakh farmers in Vidarbha region, there is a stock worth Rs 5,500 crore yet to be procured as the cotton MSP is Rs 5,500,” said Deshmukh.
MSCGMF is a cooperative body involved in the procurement of cotton in Maharashtra along with Cotton Corporation of India (CCI), the central government’s nodal agency for procurement and export of cotton.
Distress sale due to unseasonal rains
Several farmers in the state are resorting to distress sale, selling for as low as Rs 3,100 per quintal, as unseasonal rains are affecting the quality of produce, making it difficult to sell to CCI. Further, as the kharif season approaches with the monsoon, farmers need to get the crop off their hands quickly.
“We have to sell our cotton produce at any price now because the cropping season begins mid-June and we need money to buy seeds, fertilisers and pesticides. The land also needs to be tilled before sowing without which the entire upcoming season will go waste,” said Vasant Naik, a Parbhani-based cotton farmer.
Cotton is a labour-intensive cash crop with a cultivation cost of Rs 25,000 per acre, which makes farmers more vulnerable in case of delay in procurement. Usually, the procurement process concludes by the end of April. However, in the last couple of years, farmers hoarded until the last moment to cash in on the price rise due to international fluctuations.
But with the crisis developing this year, they are trying to sell as quickly as possible.
CCI procures cotton kappas only if the moisture content is between 8 per cent and 12 per cent. The MSP of Rs 5,550/quintal is reserved for the first category. It keeps falling with increasing moisture content until Rs 5,328/quintal for 12 per cent.
The farmers of Vidarbha fear their produce could end up with a moisture content of over 12 per cent.
“If cotton kappas get drenched in rain due to lack of storage option with small farmers, the whole produce will turn useless as nobody will purchase and the farmer will not get money for a year of hard work,” said Naik.
He added that most of the farmers are now selling produce to local trade and private ginneries due to sluggish procurement by CCI.
“The cotton is being sold at only Rs 3,100 per quintal, even when the MSP stands at Rs 5,500 with losses of lakhs for farmer due to slow procurement and monsoon fear,” added Vasant Naik.
‘Garment makers absent’
A CCI official said procurement is slow as garment makers, struck by an acute demand issue, have stopped buying.
“Most of the garment makers who make a heavy sale in summer have stopped procuring cotton from CCI due to no trade amid lockdown. Apart from this, migrant labourers of ginning and pressing factories have left for their home states which makes procurement of cotton slow by both the private and government sector,” said the official who didn’t wish to be named.
However, the official assured that with the easing of lockdown and subsequent opening of trade, the leftover cotton will also be procured before monsoon despite the huge quantity.
The official said only 16 procurement centres had been opened up initially, out of total 83. But all of them have now started operations.
“Also, more procurement centres are being set up at various APMCs (Agricultural Produce Market Committees) in Maharashtra and the state government has been asked to issue passes to facilitate farmers to bring kappas even from red zones,” said the official.
According to an Agricultural & Processed Food Products Export Development Authority report, India produced a record cotton crop for 2019-20 at 30.5 million bales, 15 per cent above 2018-19.