Row over ban on cotton exports intensifies

I was kept in the dark: Sharad Pawar

Gargi Parsai

Seeking Prime Minister Manmohan Singh's intervention, Union Agriculture Minister Sharad Pawar on Tuesday complained that he was not consulted on the Commerce Ministry's decision to ban cotton exports. The decision would hurt millions of farmers, he said.

The Directorate-General of Foreign Trade (DGFT), on Monday, announced an immediate ban on exports of cotton saying there could be a shortfall in the domestic market as exports had exceeded the target of 8.4 million bales. It even banned exports against registration certificates already issued.

“This is a very serious issue,” Mr. Pawar told journalists on the sidelines of a food processing conference here adding that he was taking up the issue with the Prime Minister.

“I was kept in the dark and have requested the Prime Minister for revocation of the ban as our production is higher this year and farmers are complaining of falling prices.”

Such a decision would impact lakhs of farmers, he said. Hence, it should have been taken after proper consultations either in the Cabinet Committee on Economic Affairs or Cabinet Committee on Prices, as was done in the case of wheat and sugar, he added.

Describing the decision as ‘harmful', Mr. Pawar said cotton growers in Gujarat, Andhra Pradesh and Madhya Pradesh were in great distress as traders had stopped buying cotton from them after the decision.

The move also came in for a sharp criticism from Gujarat Chief Minister Narendra Modi, who said in a letter to Prime Minister that he was ‘shocked' over the decision that would prove ‘disastrous' for farmers leading to distress sales.

Vidarbha-based Jan Andolan Samiti said the plea of the Commerce Ministry that there was a shortfall in the domestic market when the textiles industry was saying that domestic millers had enough stock to meet internal requirement was ‘controversial'.

The decision would hurt suicide-prone Vidarbha cotton growers leading to distress sales.

The country has already exported 8.5 million bales in the fiscal year, exceeding the target of 8.4 million bales.

Trade volume takes a dip

M. Soundariya Preetha

A day after the Directorate-General of Foreign Trade (DGFT) prohibited cotton exports, transactions dropped in most of the cotton markets on Tuesday. The Cotton Corporation of India has to step in to provide price support operations at some markets in Andhra Pradesh.

According to a trade source here, transactions were low in the market on Tuesday. “It is a stalemate situation,” the source said. S. Jaipal Reddy, a cotton farmer at Warangal, Andhra Pradesh, said that the yields were relatively lower in the State this year though the cost of cotton cultivation had shot up. “The decision to stop exports is very unfortunate,” he said. Farmers were now not bringing large volumes to the market and buyers were also not showing interest.

According to Bharat Vala, President of Saurashtra Ginners' Association, the members would be on a two-day strike on March 7 and 8 to protest against the decision to prohibit exports.

The Indian Cotton Federation President J. Thulasidharan said India was the second largest exporter of cotton globally and it was essential to build confidence on Indian cotton in the international market with a strong long-term policy. “We need a raw material policy with priority to the farmers and the user-industry,” he said.

V. S. Velayutham, former Chairman of the Cotton Textiles Export Promotion Council, said the intervention (ban on cotton exports) from the Government was not required at this juncture. The mills in the South did not have the financial resources to make bulk cotton purchases, though the prices had come down. The move would affect cotton sowing for the next season.

However, S. Dinakaran, Chairman of the Southern India Mills' Association, welcomed the decision to ban cotton exports. “It ensures adequate availability of cotton for the domestic textile sector till the end of the season,” he said in a release. The bulk registration of cotton export contracts took place during the last 10 days. He appealed to the Government to investigate into the spurt in cotton contract registration for exports and to take preventive steps to avoid such situations in future. Cotton export registration details should be available on the DGFT website on a daily basis as it was done earlier by the Office of the Textile Commissioner. This would enable the industry to understand the market supply-demand position, he said.

Gujarat Congress team to meet Manmohan

Manas Dasgupta

A high-level delegation of the Gujarat Congress will call on the Prime Minister, Manmohan Singh, on Wednesday to press for immediate lifting of the ban on cotton exports.

The Pradesh Congress President, Arjun Modhwadia, said here on Tuesday that the delegation, besides him, would include the leader of the opposition in the State Assembly, Shaktisinh Gohil, former chief minister and chairman of the Congress campaign committee Shankarsinh Waghela, Congress Members of Parliament from the State and Ahmed Patel, political advisor to party President Sonia Gandhi. Mr. Modhwadia admitted that the imposition of export ban had dampened cotton prices in the domestic market causing great hardships to cotton growers in the country, particularly Gujarat that produced about 40 per cent of the total cotton production.

While Mr. Modhwadia claimed that cotton prices had declined to about Rs.850 per 20 kg, as against the production cost of about Rs.900, market sources said the export ban order had an immediate impact on prices in the domestic market where it declined to about Rs.700 per 20 kg.

Besides, the state unit of the Bharatiya Kisan Sangh on Tuesday organised demonstrations at various district headquarters and submitted memorandum to the district collectors demanding lifting of the ban. Owners of the cotton ginning and pressing mills in the state have threatened to go on an indefinite strike to press for lifting of the export ban.

Mr. Gohil said the problems for the cotton growers in Gujarat had been further compounded by the levy of high value-added tax on cotton.

Unlike in Maharashtra, where the state government had declared a Rs.2,000 special package for cotton growers, no such step had been taken by the Modi government in the state causing more problems to cotton growers, he said.

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Printable version | Mar 1, 2021 7:51:33 PM |

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