Textile mills here, which are among the largest consumers of cotton, have sought introduction of Direct Benefit Transfer System for payment of Minimum Support Price (MSP) to cotton farmers.

Welcoming the increase in MSP for cotton announced by the Central Government, the Southern India Mills’ Association chairman P. Nataraj, and chairman of Confederation of Indian Textile Industry, Sanjay K. Jain, said there should be a direct subsidy route so that interests of farmers and the industry are protected.

According to Mr. Nataraj, the MSP for medium staple cotton is increased from Rs. 4,020 a quintal to Rs. 5,150 a quintal and that of long staple cotton from Rs. 4,320 a quintal to Rs. 5,450.

The MSP increased by Rs. 1,320 a quintal between 2009-2010 and 2017-2018 and by Rs. 1,130 a quintal in 2018-2019. The impact will be huge and unprecedented, said Mr. Jain. “At one level, the move would certainly increase farmers’ income, leading to an increase in domestic consumption that would eventually support the overall Indian economy. However, we need to examine the hike from different perspectives and understand that the lakhs of farmers gain should not impact the 120 billion dollar industry which employs directly and indirectly more than 10 crore people,” he said.

The real impact depends on the movement of international prices of cotton, he added.

In order to help the textile mills compete with multi-national companies and cover cotton during the peak arrival season, the government should implement cotton price stabilisation fund, providing 5 % to 7 % interest subvention, 10 % margin money and nine months credit limit. It should also introduce Technology Mission on Cotton phase II that has been submitted by the Textile Ministry, said Mr. Nataraj.

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