India Raises Minimum Support Rate for Cotton
June 18, 2012 
The government of India has raised the minimum support price (MSP) for medium staple cotton to 30 cents/lb, according to the Committee on Economic Affairs of the Government of India.
Effective on June 15, the minimum price for medium staple cotton was increased 6.6 cents/lb for the 2012-13 season, an increase of 22% (the MSP for medium staple cotton for 2011-12 was about 23 cents/lb). The MSP for long staple has been fixed at slightly more than 32 cents/lb.
The increase was announced in an effort to encourage farmers to grow more food and cash crops, which the government hopes will provide a larger boost the Indian economy. Since last year, the country’s economic growth has been sluggish and inflation has been rising.
The country’s Commission for Agricultural Costs and Prices recommended a slightly lower MSP (about 3 cents/lb less) for cotton, but with this season’s monsoon rains getting off to a weak start, the price was adjusted slightly higher to encourage farmers to stick with the natural fiber.
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