A major crisis is brewing in the cotton sector in India, with a bumper harvest coinciding with a drastic cut in imports by China, the biggest buyer of the crop. And with global cotton prices plunging, farmers here in are a worried lot as the huge investments they made in expanding the area of cotton cultivation in recent years would fail to pay off.
Last week, key ministers of the Indian government were busy in meetings, trying to evolve a policy to bail out millions of farmers whose livelihood is suddenly threatened by the global cotton crisis. Agriculture minister Radha Mohan Singh, together with Santosh Gangwar, the textiles minister; Nirmala Sitharaman, the commerce minister; and newly-appointed labour minister Bangaru Dattatreya, were interacting with bureaucrats in trying to find a way out of the crisis.
With a record cotton harvest, the government is worried that farmers may resort to distress sales of the crop if prices continue to tumble. Cotton prices in India have started falling, even dipping below the minimum support price (MSP) of around Rs4,000 a quintal. The ministers directed the Cotton Corporation of India (CCI) to boost its purchases from farmers, which would hopefully ensure there would be no distress sales.