The Indian Express "From the Fields", new Delhi, Friday, November 18, 2011, reports through its correspondent Vivek Deshpande from Nagpur that 'even as political parties in Maharashtra, ruling and opposition alike, and farm activists have upped the ante for a hike in cotton minimum support price (MSP), a study of the cost-benefit ratio of cotton farming shows that there does exist a ground for immediate hike."
It's like the proverbial riddle -whether egg-first or hen-first? Is it the cost of cultivation that justifies the hiking support price or the uneconomical support price that leads to area-reduction in cotton cultivation?
Production/productivity varies from state to state mainly based on assured or protected irrigation to the farmers. In Punjab, Haryana and Rajasthan irrigation is 100% for their cotton crop, while Maharashtra enjoys 7% and Vidarbha still less at 3%. Probably MSP is fixed for certain crops at the national level and the uniformity is maintained, whereas the conditions prevalent and the hardships undergone by the farmers in farming operation and crop returns differ widely from place to place. NCP leader Ajit Pawar has said at Yavatmal recently that the MSP be hiked to Rs.6,000/-. A study conducted by the Central Institute for Cotton Research (CICR) has estimated that the cost of cotton production in backward regions like Vidarbha has gone up by 42% per quintal this year as compared to last year. In rupee terms, as against Rs.25,662/- it has gone up to Rs.36,359/- this year as indicated by economists A.R. Reddy and Anuradha Narala. Thus with the current MSP, the Vidarbha cotton farmer ends up suffering losses, which would certainly prove crippling for small and marginal farmers in particular. Many farm activists have claimed that cotton production has been hit this year due to erratic rains, a claim however, refuted by state officials. "A farmer with two acres of land will ideally produce up to 10 quintals with Bt cotton. And under the circumstances, he would lose Rs.7,000/- per annum at the MSP rate. That the open market prices save them from that blow, is a fact," said an official without wanting to be quoted.
The truth of the matter is that cotton farming and marketing has been thoroughly mismanaged both at the national and regional levels. Each region requires a thorough study of its local economy and the measures needed to be taken so that both the farming community in different states as well as the processing industry in the country are benefited at the end of the day. The Planning Commission in New Delhi and the Maharashtra State Planning Board at Mumbai need to study this aspect of farming economics in detail and suggest solid and viable remedies for implementation by both the Central and State Governments.
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