Textile & Fashion

Intervention for Increase in MSP


Cotton is one of the most important cash crops produced in India. Indian cotton finds worldwide market. A lion share of this cotton is owned by the textile mills. They buy raw cotton from the farmers by paying the MSP, that is, Minimum Support Price, to them.

Recently, Central Government has announced increment in MSP. The Chairman of Southern India Mill’s Association informed that the subsidy for medium staple cotton has increased from Rs.4, 020 to Rs.5, 150 per quintal. Likewise, the MSP for long staple cotton has become Rs.5, 540 from Rs.4, 320 per quintal. The annual assessment of MSP clearly portrays its significant increment up to Rs.1, 320 in between 2009-2010 to 2017-2018. But, the increment over the current year, that is, 2018-2019 stands out with a lump sum of Rs.1, 130.

Alongside the increased subsidy, Central Government also implemented the Direct Benefit Transfer System for smooth payment of MSP to the farmers. This scheme ensures the direct communication and monetary transfer from the textile industry to the farmers, thus protecting the interests of both.

With the introduction of the above-said modifications, the authority is expecting fruitful results from Indian Agro-economy. These practices are supposed to increase the income of the farmers, eventually leading to the betterment of their economic background.

However, the impact of these implementations largely depends on the rise and fall of international price of cotton. In order to compete with the multi-national companies, Indian mills need cotton price stabilization fund. They have proposed 5-7% interest subvention, 10% margin money and nine months credit limit to the Textile Ministry. The request for introduction of Technology Mission on Cotton Phase II has been submitted to the same.

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