Friday, February 17, 2006

Cotton and Free Market!

Sainath reports on the effect of State support, withdrawl and "free market" policies on the cotton farmers of Vidarbha, already facing a torrid time.
I wonder if anyone in the state assembly is taking notice? and doing anything about it, other than announcing the Rs. 1075 crore relief package, which accoring to a statement from Kishore Tiwari (Jan Andolan Samiti) quoted in Sainath's previous report, has not reached/benefitted the farmers or helped them in anyway yet.

Vidharbha: the `forced privatisation' of cotton

Disputes over output do not hide the trouble Maharashtra's cotton economy is in. Small farmers face another year of huge losses. The role of nature is very minor compared to conscious policy measures that have undermined the farmer and world cotton prices.

Last year, there were 411 official centres to procure cotton. This year a mere 141. "But that's because open market prices are better," insists N.P. Hirani. He is chairman of the Maharashtra State Cooperative Cotton Growers' Marketing Federation. But on the ground, his claim is challenged by farmers in Vidharbha. Most say the traders' prices are even lower than the MSP.


The fall in procurement is even more drastic than the fall in the number of Government centres. The Cotton Federation's official chart shows that by February 11 this year, it had procured just 4.83 lakh quintals. A gigantic fall from the 178 lakh quintals picked up by the same date last year. In cash terms the fall is massive. The value of what was acquired from the farmers last year on this date was Rs.3,970 crore. This year, it is a mere Rs.54.73 crore.

Imports of cotton have further depressed prices over the years. India's cotton imports between 1997-98 and 2004-05 stood at over 115 lakh bales. That is over three times what was imported in the preceding 25 years. In the same 1997-98 to 2004-05 period, exports did not cross 30 lakh bales. In some years, they fell in both number of bales and value earned.

World cotton prices tumbled in the 1990s as the United States pumped billions of dollars of subsidies each year to its 25,000 cotton producers. "And we," says Mr. Jawandia, "have left our millions of cotton farmers to the mercy of traders and the subsidised global market. Now anyone can import or export it. The import duty on cotton is ten per cent. And if you're the textile lobby you don't pay even that. Anyone can buy, sell or trade in it. Private trade is up, boosted by a withdrawing state. Our cotton economy is the closest thing to a `free market' — and see the results."

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