For the State's silk farmers, the future is not smooth

With both the Centre and State governments resorting to mere promises to help them tide through their plight, farmers in the State have resorted to agitations without much success.

Silk cocoon producers saw their business blooming over a decade thanks to the amendment to Central Silk Board Act which freed them from the shackles of governmental control over their trade. But from February 2011 on, prices of cocoons and raw silk have hit the pits seeing a free fall in recent months, following a dramatic reduction in raw silk import duty from 31 per cent to 5 per cent, in the last Union Budget. Cocoon farmers alleged that this was done to favour silk weavers who lobbied hard to get much cheaper silk from abroad at the cost of domestic producers.

Following the sharp reduction in duty, resulting in huge imports of Chinese silk flooding the Indian market, prices of silk cocoons are now ruling at rock bottom prices of Rs 150 to Rs 250 per kg and cross breeds at Rs 100-120 per kg.

Farmers are naturally angry. Chikkaballapur-based Zilla Reshme Hitharakshana Vedike Convenor Yaluvahalli Sonne Gowda charged that, traders and master weavers buy Chinese silk over Indian variety creating artificial glut in the market besides pushing local silk prices down. The farmers fear that China, in collusion with local traders and master weavers may soon monopolise the Indian market with the result they will be left with no choice but to shift from their traditional mulberry cultivation.

The other reasons inducing shift away are: rising labour costs due to compulsory minimum wages under NREGA and more profitable crops like coconut, sugarcane and turmeric. They are also less labour-intensive in nature.  

“We are incurring losses of Rs 1 crore to Rs 2 crore every day due to the Centre’s arbitrary decision,” says Chikkaballapur District Silk Growers’ Welfare Committee President Malluru Shivanna, ruing that despite Karnataka meeting more than half of the country’s silk requirement, the apathetic conditions of silk growers continue to be remain deplorable. Currently, he points out, that India produces around 20,000 tonnes of raw silk, while the annual requirement is around 30,000 tonnes. The deficit is being met by China imports.

Say the farmers’ representatives, unlike weavers “we cannot pass on the price and silk rearing cannot be mechanised as its labour intensive.” They fear that sericulture will be wiped out in India and Karnataka as in Japan, while China will spread its stranglehold in the Indian market. It is understood that Karnataka produces around 55,000 tonne of cocoons and 8,000 tonne of raw silk annually.

They point out that the current crisis can be contained by providing minimum support price for cocoons, banning duty free import of silk, reversing the current import duty on raw silk upward besides buttressing both Karnataka Silk Marketing Board, the nodal procurement agency and Karnataka Silk Industries Corporation by providing adequate financial resources to help them in market intervention and provide adequate loans to silk growers. Furthermore, they said, the government must fix the cocoon rate to pre-February price as also raw silk produced by reelers at Rs 2,500 to Rs 3,000 a kg. As per the City’s silk exchange, through which farmers sell raw silk after selling to private buyers, there is slight dip in the quantity of raw silk being sold. During the financial year ended March 31, 2011, total raw silk sold through the exchange was at 1,037 tonnes against 1,084 tonnes in the previous year. There are 10 cotton exchanges in Karnataka at all prominent cocoon and silk producing districts and there are 62 cocoons markets.
Says Malluru Shivanna that farmers are ready to increase the cocoons production  should the traders desire in order to bridge the demand supply gap of the raw silk so that there will be no need for Chinese imports. “By adding bit of infrastructure and other facilities in six months time we can do this”, he observes.

Traders argument

The traders/master weavers’ community, however, are refusing to buy the farmers’ arguments. According to them, overproduction of cocoons has been having a cascading effect leading to enhanced production of raw silk triggering a depression in their prices and in return leading to erosion in the margins. They refuse to accede to farmers’ charge that volatile fluctuation in prices is due to import duty reduction.

In fact, Mohammed Mehboob Pasha from Shidlaghatta, a silk trader, said that they are suffering erosion in their margins by buying cocoons flooding the market, to protect the farmers’ lot. The traders fear that if they refuse to lift cocoons, farmers will shift to cultivation of different crops for their survival.

Given the high cost of living, labour cost, rentals and other overheads, traders and weavers feel that if farmers resort to distress cultivation of other crops, then they would be starved of precious cocoons, vital for production of silk. This, in turn, will ruin their business. The traders opine that the government must reimburse losses being suffered by farmers as they cannot protect them for long term.

State government officials, meanwhile, on condition of anonymity, said a team of officials were working out the possible financial implications of the minimum support price and the formal announcement to this effect will be made by the chief minister.

The government, in February, sources said, released Rs 12 crore to KSMB, which lifted 60 tonnes of cocoons lying in its godown besides providing some financial relief to farmers to the tune of Rs 3 crore. However, Vedike convener Gowda says the government had promised monetary intervention to the tune of Rs 30 crore which has not yet happened.
He said besides ‘Vidhana Soudha Chalo’ on June 14, 2011, when farmers from across the State would lay seize to the State’s centre of power, similar agitation has been proposed at zilla levels in Chikkaballapur and Shidlaghatta in the form of zilla bandh on June 28, 2011.

Gowda alleged that, even though domestic silk costs around Rs 1,400 per kg and Chinese silk Rs 2,600 per kg, traders go for the Chinese variety to create artificial glut in the market of domestic silk and depress the price of the product. He pointed out that while cost of production of cocoon is over Rs 250 for a lot, farmers’ are being forced to sell them between Rs 100-125 per lot incurring losses.

State sericulture officials, on the other hand, say they are helpless since it is open market trade and they have no legal powers to check or enforce any restrictions on the trade’s conduct. Till a resolution is arrived it’s a monsoon season laden with simmering discontent ready to pour out in torrents.