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Thread: Ministry of Textiles - Cotton Sector

  1. #11
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    Thumbs up Cotton Sector - Progress of Mini Missions III and IV.

    Cotton Sector

    Progress of Mini Missions III and IV

    250 Projects have been sanctioned under MM III out of which 176 have reported completion ;

    1000 Units have been modernized/ upgraded under Mini Mission IV out of which 855 have reported completion.

  2. #12
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    Thumbs up Cotton Sector - Budgetary Provision /Release of funds.

    Cotton Sector


    Budgetary Provision /Release of funds

    Funds released during the 9th, 10th and 11th five year plans are as under :-

    During 9th five year plan
    Rs. 55.00 crores
    During 10th five year plan
    Rs. 165 crores
    During 11th five year plan
    Rs. 100 crores (the total outlay of the plan up 31.3.2009 is Rs. 241 crores which includes NER)

    Dues pending are under process in consultation/ approval with the IFW.

  3. #13
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    Thumbs up Cotton Sector - Price Support Mechanism.

    Cotton Sector


    Price Support Mechanism

    Cotton is primarily marketed mostly in the form of kapas (seed cotton) in India, unlike in leading cotton-growing countries where the seed cotton is processed and then marketed as processed bales. The three marketing agencies involved in cotton trade are (i) private sector comprising traders, owners of ginneries operating as individual business proprietors, partnership firms and private limited companies (ii) public sector agencies like the Cotton Corporation of India (CCI) and (iii) Co-operative Sector.

    The CCI a PSU under the Ministry of Textiles is the sole Public sector organization involved in procurement and trading of cotton. It was established in 1970 primarily to conduct the price stabilization functions through the Minimum Support Price (MSP) operations of government of India and to ensure reasonable prices to cotton growers in the country. Till 1984-85, the CCI conducted only MSP operations. From 1985-86 onwards its MSP functions got reduced considerably on account of favorable market prices of cotton. During the decade followed by 1984-85, CCI conducted significant MSP operations only twice. It started procuring cotton on commercial terms by paying premium over and above the MSP. CCI was also declared as one of the canalizing agency for export of cotton and it exported most of the cotton from India.

    Every year before the commencement of the Cotton Season (Oct to Sept), the Ministry of Agriculture based on the recommendations of Advisory Board viz., Commission for Agricultural Costs and Prices (CACP) fixes the MSP with a view to give incentives to the cotton farmers of the country.

    Accordingly, taking into consideration of the recommendation of CACP the Ministry of Agriculture had fixed MSP for two basic varieties of cotton viz. Medium Staple length cotton having 2.5. % span length of 24.5 mm to 25 mm with micornnaire value of 4.3 to 5.1 and long staple length cotton having 2.5% span length of 29.5 to 30.5 mm with micronnaire of 3.5 to 4.3 of new crop of seed cotton (kapas) of Fair Average Quality (FAQ) for cotton season 2008-09. The support price for medium staple length cotton has been fixed at Rs. 2500/- per quintal and for long staple at Rs. 3000/- per quintal. Based on the support Price of these two basic varieties of kapas seed, the MSP for other classes is fixed by the Textile Commissioner.

    The prices of cotton started dipping from October, 2008; ostensibly on account of global economic recession and financial meltdown. Looking into the cotton situation, the government of India made cotton imports duty free and also removed the incentive of duty drawback of 1% on cotton exports from the country. Subsequently for the cotton year 2008-09, the Government of India fixed MSP for Long Staple and Medium Staple varieties of cotton at Rs. 3000/- per quintal and Rs. 2500 per quintal leading to a hike of 48% and 39% over the last year. MSPs for other varieties were also announced by the Office of the Textile Commissioner based on normal market price differentials and technical parameters. As a result Government nominated agencies namely the Cotton Corporation of India and NAFED have to procure Kapas from the farmers at the extant MSP. The Cabinet in its meeting held on 5th February approved for the provision of additional Rs. 500 crores by way of RE in financial year 2008-09 to meet the anticipated losses and also for the direction to CCI to dispose of cotton procured by MSP rate by offering discounts for bulk purchases. Another Note has been placed before the Cabinet for providing the balance requirement of Rs. 1473 crores to meet the losses incurred during the cotton season 2008-09.



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