India's Government Leaves Cotton Farmers Guessing

By Jim.Robinson|May 8, 2013

Cotton sowing began in northern India about three weeks ago and will continue till mid-June. Ideally, MSP for various agriculture products — including cotton — would be announced before the sowing begins. Timely declaration of MSP helps farmers decide about future sowing but the government system has once again failed in the duty. This dilutes the very purpose of determination of the MSP.

India’s Commission for Agricultural Costs and Prices Commission (CACP) was created to recommend support prices for agriculture products. It studies the costs of production of agricultural commodities, calculates the returns due to the farmers, and then makes its recommendation for the MSP to the Indian government. The central government’s task is to announce the MSPs before the beginning of the new sowing season, but no deadline has been set for the declarations. At this point, no MSP has been announced for cotton, even though sowing has already begun.

Current recommendations

The Agriculture Commission submitted its recommendations for the current year’s MSP of the current year to the government in mid-April, suggesting an increase of approximately 1 cent per pound for seed cotton. But the increase will not go into effect until the Indian government gives its final decision, and Indian officials reserve the right to amend or reject the Agriculture Commission’s recommendation. In addition, there is no transparency in the procedure. The Cotton Advisory Board and state governments have failed to make an effective representation in this matter.