The cotton conundrum seeks honest answers
Dec 10, 2006 - 2:29:46 PM
, Reviewed by: Priya Saxena
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And sample this: In 1975 a motorbike was worth 10 months' salary, eight tolas of gold and eight quintals of cotton; in 2005, a motorbike was worth two and-a-half months' salary, five tolas of gold and 18 quintals of cotton! And finally an instructive comparison: Since 1975, agricultural products' prices went up by three to four times, trading commodities - prices went up by 15-20 times, industrial sector prices went up by 15-18 times and the organised sector's wages went up by 40-45 times. You and I, who write and read such articles, mostly belong to this last - but not the least - category!
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By Shyam Pandharipande,
[RxPG] The death of a cotton grower in police firing in Maharashtra's Yavatmal district is bound to bring to the boil the unresolved controversy of cotton pricing in India.
The main cause of Friday's outburst of cotton farmers' anger at the Agriculture Price Marketing Committee - market yard in Wani may have been the slow pace of procurement or foul play in grading as alleged by them. But the basic reason behind the angst is the uneconomic proposition that cotton farming has become due to the wily cotton pricing mechanism in the world market
The Democratic Front government in Maharashtra has repeatedly expressed its inability to raise the cotton procurement price above Rs.1,900 per quintal or offer even a paltry sum of Rs.500 a quintal as advance bonus to the cotton growers. Nor is it ready to raise the import duty on cotton to 50 percent from the present 10 percent. This despite the unabated suicide spiral in Vidarbha's cotton belt, persistent demand of thousands of farmers on the brink and the forceful plea to do so by none other than the National Commission of Farmers' chairman M.S. Swaminathan - the ruling father of India's green revolution!
The government's alibi after it divested itself of the obligation to protect the cotton farmers' interests through monopoly procurement scheme is that the price of cotton in India is subject to price fluctuations in the international market. By downsizing the state marketing federation apparatus via a voluntary retirement scheme, it has drastically reduced its role even as one of the players in cotton purchase alongside private traders. The idea behind ending the government monopoly in cotton purchase was to increase its efficiency by competing with private players. However, its continued presence in the market still means a guarantee to protect cotton growers' interests.
As it happens this year, the private traders are offering a lower price than the federation. But by opening only half the number of procurement centres that it had promised - that too pretty late in the day - and then closing them intermittently on one pretext or another, and making the farmers wait for their turn endlessly and refusing to fix the right grade of the cotton, the federation is virtually playing into the hands of private traders.
It is this game that has apparently triggered the pent-up anger of the distressed cotton growers and more than a hundred of them are committing suicide in Vidarbha every month.
Cornered by the opposition and even the ruling party members over the issue of raising the procurement price, the state marketing minister Harshavardhan Patil made a nebulous promise in the assembly that the state would follow suit if the centre raised the price. Outside the house, the Deputy Chief Minister R.R. Patil promised to pay the difference to the farmers if the private traders paid lower price than the federation. The beleaguered government's latest promise is that it would announce its policy before winding up the on-going winter session of the legislature in Nagpur.
Meanwhile, the Wani market yard of the APMC went up in flames with irate farmers attacking the 'manipulative' graders and the police and burning down several vehicles and a portion of the APMC building. Police opened fire twice to control the rampaging mob causing death of a young farmer and injuring at least half a dozen others, including a girl standing at the door of her house quite some distance away. The government has announced cash compensation to the bereaved family and the injured farmers and suspension of a lower rung police official.
And it doesn't need an astrologer to predict announcement of a higher procurement price in a few days - may be in the next two days.
What is the message? That, if you want the government to act, resort to violence! That the government talks of common man's welfare but plays into the hands of the market forces at the drop of a hat to the detriment of the same common man who gives them political power.
The latest example is the government policy and proclamations vis-à-vis Bt. Cotton. As rural affairs editor P. Sainath of The Hindu has pointed out in his recent article, the government predicted a bumper cotton crop and proclaimed that it was the wonder that Monsanto's Bt. Cotton was working. The obvious objective was two-fold - to promote Bt. Cottonseed and effect a fall in cotton prices!
It turns out that the crop is barely half of what the government predicted. As cotton growing farmers continued to commit suicide, the Central Institute of Cotton Research - blamed it on spurious Bt. Cotton seeds.
Actually there were no spurious seeds as there could have been no takers for it since Monsanto had more than halved their prices.
Then the central agriculture ministry stoutly stood by its decision to promote Bt. Cottonseed and allow its commercial cultivation even as the agriculture commissioner of Maharashtra announced the results of a survey that said, in effect, that Bt. Cotton was uneconomical in rain-fed farming!
As for the effect the government policies have had on the agrarian economy, in this case the cotton farming, here are some interesting figures and statistics: The cultivation cost per acre of cotton is Rs.12-13,000; an acre yields 4-5 quintals cotton which fetches a price of Rs.1,900 per quintal - which means a net loss of Rs.3,000 per acre.
Since 1970, the price of cotton has risen 20 times whereas the price of diesel, which is required to run the farm pumps has risen by more than 40 times. And so has the cost of cultivation.
And sample this: In 1975 a motorbike was worth 10 months' salary, eight tolas of gold and eight quintals of cotton; in 2005, a motorbike was worth two and-a-half months' salary, five tolas of gold and 18 quintals of cotton! And finally an instructive comparison: Since 1975, agricultural products' prices went up by three to four times, trading commodities - prices went up by 15-20 times, industrial sector prices went up by 15-18 times and the organised sector's wages went up by 40-45 times. You and I, who write and read such articles, mostly belong to this last - but not the least - category!
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