The Centre will spend ₹1,061 crore to reimburse the Cotton Corporation of India (CCI) and its sub-agent in Maharashtra for procuring cotton at the minimum support price in that State since 2014.
The decision to give post facto approval to the MSP operations was taken by the Cabinet Committee on Economic Affairs at a meeting on Saturday, an official statement said.
The approval will help in price support operations to stabilise cotton prices, and is primarily aimed at safeguarding the interests of farmers and controlling any distress sale, the statement said.
Maharashtra is the country’s second largest producer of cotton. The MSP operations were carried out by the CCI’s sub-agent, Maharashtra State Cooperative Cotton Growers Marketing Federation Limited (MSCCGMFL).
The Centre will spend ₹312.93 crore to reimburse the losses to the CCI and the MSCCGMFL on sale of cotton procured during the cotton years (October-September) 2017-18 and 2018-19, and incur an additional expenditure of ₹748.08 crore for 2014-15 and 2015-16.