Lift the ban

The government’s decision to impose an immediate ban on cotton exports is ill-timed and ill-considered, as it would badly hurt the interests of cotton farmers.

Strangely, the commerce ministry took a unilateral decision and the Directorate-General of Foreign Trade announced it on Monday without consultation even within the government. There was no discussion on the matter with the agriculture ministry and pros and cons have been evaluated. Agriculture minister Sharad Pawar has stated in public that he was unaware of the decision and requested the prime minister to withdraw the ban. Farmers’ organisations in cotton-growing states  have also protested as traders have stopped buying and stocks are piling up.

The ostensible reason for the ban is that the exports have exceeded their annual target and there is likely to be a shortage in the domestic market. India is the second largest producer and exporter of cotton in the world and karnataka is one of the major producers. The ban has led to a sharp rise in global prices and a steep fall in domestic prices. Production in India is higher this year and there is no likelihood of shortage.

The fall in domestic prices has forced the Cotton Corporation of India to provide for procurement of cotton at the minimum support price. But the entire stock cannot be bought and farmers will certainly suffer. The market price is now said to be below the cost of production. Cotton sowing for the next season also will be affected because the farmers will not be confident of selling the produce.

The commerce ministry has argued that the ban is needed to ensure adequate supplies to the textile industry. This will is not accepted as a genuine reason because the mills had reduced procurement this year not because there was short supply of cotton but because they were unable to make purchases. This is because of the various problems faced by the industry, much of which is sick.

The industry needs revival through modernisation and other means. The government should not try to help yarn and textile makers at the expense of the farmers. The interests of both sections should be protected. Cotton farmers have often been in the news for their problems which have driven many of them to suicide. Ad hoc decisions will not help, and what is needed is a long-term holistic policy on production, mills’ requirements and exports.