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PRICE SUPPORT
OPERATIONS:
For every crop year,
Government of India fixes a Minimum Support Prices
(MSP) for the basic two varieties viz. J-34 (Rajasthan)
and H-4. The MSP for other varieties are then
fixed by the Office of the Textile Commissioner, Mumbai,
depending upon quality differentials and market
differentials of different varieties from the two basic
varieties. As and when kapas prices of any variety
touch the level of MSP, CCI as a Nodal Agency of
Government of India, resorts to immediate market
intervention and makes purchases of kapas at MSP without
any quantitative limits. The MSPs of different
varieties are fixed for FAQ grade kapas stipulating
minimum quality parameters on staple length and mic
value. Since total kapas arrivals in the market
yards, do not match the prescribed
parameters of FAQ grade, Corporation allows purchases of
below FAQ grade kapas also by offering prices in
commensurate with quality and within the MSP of
the variety concerned. This helps the cotton
farmers in selling their kapas produce under MSP
operations and avoid distress sales.
Corporation keeps itself ever ready to meet the
eventualities of support price operations in all
the cotton growing States. Depending upon the intensity
of these operations, Corporation creates required
infrastructure in the form of regular procurement
centres as well as satellite centres so that farmers are
not compelled to travel long distances for selling their
kapas produce. Processing of kapas through
satellite centers, is arranged by CCI at the nearest
processing points.
Procurement of kapas through the MSP
mechanism has benefited the cotton farmers of the
country, in a big way through assured price for their
kapas produce as well as timely payments and it has
helped in retaining their interest in cotton
cultivation. Upto late 1990s and before the onset
of globalization process, the occasions for MSP
operations in the country were far and few as the
domestic cotton prices normally ruled above the
international prices. However, with globalization
since 1998-99 and thereafter, the occasions for kapas
prices touching the MSP levels have increased owing to
domestic prices ruling in tandem with international
prices.
Details
of State-wise MSP operations
MSP Prices
COMMERCIAL OPERATIONS:
In the absence of MSP operations, CCI
undertakes viable commercial operations entirely at its
own risk, for supply of cotton to mills in the domestic
market. The purchases of kapas under commercial
operations are also made through auctions conducted by
the APMCs in the notified market yards. These
commercial operations are basically dovetailed to
indents and expected immediate demand from the mills
under institutional sector as well as private
sector. The main aim of these operations is to
meet at least the annual cost of the minimum
infrastructure maintained by the Corporation for
Price Support operations. Here again, CCI
Officials operate in the market in competition with
other buyers including private trade and mills, by
paying competitive prices for purchases of kapas from
the cotton growers. For the benefit of the cotton
growers, CCI makes purchases at an accelerated
pace when market rules easy and slows down when
prices are higher, so as to bring about necessary
stability and give a desired direction to the ruling
market prices. The prices paid by CCI are not only
higher than the support prices but very much at par with
the highest prices ruling in the market. In
addition to this, purchases are made
simultaneously for all grades of kapas so that cotton
farmers can sell their produce without any difficulty
and realize the sale price in commensurate with the
quality of their produce. Even though the
commercial operations are undertaken depending upon its
commercial viability, still it helps the interest of the
cotton growers through stabilization of kapas
prices.
Details
of State-wise Commercial Operations
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