Why in news?
The Cabinet Committee on Economic Affairs approved ₹1,718.56 crore in Minimum Support Price (MSP) funding for the Cotton Corporation of India (CCI) for the 2023‑24 cotton season. This funding ensures that farmers receive assured prices when market rates fall below the government‑declared MSP.
Background
Cotton is a major cash crop in India, supporting nearly 60 million farmers and another 40–50 million people in the textile value chain. To protect growers from price crashes, the government operates an MSP mechanism through nodal agencies. The Cotton Corporation of India, established in 1970, is a public sector undertaking under the Ministry of Textiles and serves as the central agency for MSP operations in cotton.
About the Cotton Corporation of India
- Organisation: CCI is a public sector company governed by the Companies Act. Its headquarters are in Navi Mumbai and it maintains 19 branch offices and more than 500 procurement centres across India’s eleven major cotton‑growing states.
- Functions:
- Price support operations: CCI procures seed cotton (kapas) when market prices fall below MSP. There is no quantitative limit on procurement, ensuring remunerative prices and preventing distress sales.
- Commercial operations: Beyond MSP needs, CCI also procures and sells cotton to maintain stable supplies for the domestic textile industry, especially during lean seasons.
- Market stabilisation: By acting as a buffer agency, CCI moderates price volatility and balances demand and supply.
- Cotton cultivation: Cotton grows best at temperatures of 21–30 °C with about 210 frost‑free days and 50–100 cm of well‑ distributed rainfall. It thrives on black soils (regur) in the Deccan Plateau as well as alluvial soils in north India and lateritic soils in the south. Major producers include Gujarat, Telangana and Maharashtra.
- Technological initiatives: CCI has introduced digital platforms such as the Bale Identification and Traceability System and the “Cott‑Ally” mobile app to improve transparency and farmer engagement.
Importance of MSP funding
- MSP funding provides income security for cotton farmers during market slumps, preventing distress sales.
- By ensuring a steady supply of raw cotton, the scheme supports India’s textiles sector and export competitiveness.
- The funding reinforces government commitment to the MSP system and encourages farmers to continue cultivating cotton.
Source: PIB
