Cotton growers slam export quota cap

Aimed at helping domestic industry, Centres move hits growers

Opposing the export cap at 5.5 million bales, traders have stopped purchasing the produce from cotton farmers for the past 12 days. The quantitative restriction, imposed in
October-November last year, has led to 30 per cent fall in prices since then.

“The domestic market demand for cotton is 220 lakh bales. We need to export the rest of the produce in the interest of farmers and traders,” said V P Linganagoudar, president, State Cotton Association.

Growers already have cotton stocks from the previous year. Cotton cultivation is a high cost exercise in view of the pests and disease the crop is vulnerable to, and the dip in demand will land farmers in financial problems.

“We have stopped purchase of cotton from May 12 in the State. The purchase has been halted in Gujarat, Andhra Pradesh and Maharashtra also,” Linganagoudar said.
The Union Government has been urged to lift the ban on export and the purchase will not be resumed till the demand is met, he said.

Cotton, a major export from India, is a lucrative crop for growers and traders. India produces 320 crore bales (1 bale=1.70 quintal) of cotton. Karnataka contributes 12-13 lakh bales, Gujarat 1.20 crore bales, Maharashtra 80 lakh and Andhra Pradesh 60 lakh bales.

Price crash

However, 45 lakh bales from the previous year’s production is still lying in godowns, leading to fall in prices.

Rubbing salt into wounds, the government, apart from restricting export, has raised commercial tax on the commodity from four to five percent.

In its turn, the State Government has increased the Value Added Tax on cotton, affecting the sale of cotton, said president of district chambers of industries and commerce M C Hiremutt.  Farmers and traders from Chitradurga, Davangere, Ranebennur, Bailahongala, Haveri, Gokak, Savadatti, Raichur, Bellary, Bagalkot, and Bijapur have discussed the issue. Protests are being staged at the respective APMCs. A memorandum was also submitted to the Dharwad Deputy Commissioner, Hiremutt said. However, one silver lining for farmers is the strong lobbying by Agriculture Minister Sharad Pawar who has been demanding lifting of the export cap to allow farmers and traders take advantage of the high international prices of the natural fibre.