Chandigarh – The Cotton Corporation of India (CCI), a central government agency, has commenced purchasing cotton produce on minimum support price (MSP) across 14 strategic locations in five districts of Punjab’s semi-arid region from Wednesday, October 1. This CCI cotton procurement MSP initiative aims to provide crucial price support to farmers who have been receiving significantly lower rates from private buyers in recent weeks.
Distribution of CCI Cotton Procurement MSP Centers
The CCI cotton procurement MSP operations are strategically distributed across Punjab’s cotton-growing belt. Bathinda and Muktsar will host the maximum number of centers with four each, while Mansa will have three procurement points. Fazilka has been allocated two centers, and Barnala will have one mandi operational for the procurement drive.
This widespread network ensures that farmers across the semi-arid region have convenient access to government procurement facilities, reducing transportation costs and enabling timely sales of their produce.
Current Market Situation and Price Gap
According to Punjab Mandi Board data, approximately 30,000 quintals of cotton had arrived across south Malwa districts until Tuesday. However, the market situation has been challenging for farmers, with private buyers offering significantly lower prices than the government-set MSP.
Stakeholders indicate that with the advent of the CCI cotton procurement MSP program, prices may stabilize as farmers have been receiving only ₹6,800-7,000 per quintal from private traders. This represents a substantial shortfall of ₹1,000-1,200 per quintal compared to this season’s officially declared MSP rates.
Official MSP Rates for Current Season
For the current rabi marketing season, the central government has fixed differential rates based on cotton quality. The CCI cotton procurement MSP stands at ₹7,710 per quintal for medium staple length cotton, while superior quality cotton commands ₹8,110 per quintal.
These rates are designed to ensure remunerative prices for farmers and encourage continued cotton cultivation in the region. However, officials from both the state government and CCI have attributed the lower market rates to specific quality issues affecting the current crop.
Quality Concerns Affecting Cotton Prices
State and CCI officials have identified two primary factors contributing to depressed market prices. First, farmers have been bringing unginned cotton (raw crop that still contains seeds) to the market rather than processed cotton. Second, high moisture content in the produce has affected quality assessments and pricing.
The moisture content issue has been particularly significant this year due to unseasonal rainfall that affected the cotton crop during critical growth and harvesting phases. The CCI cotton procurement MSP system, however, will help establish baseline prices regardless of these temporary quality fluctuations.
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Market Dynamics and Textile Sector Impact
Industry experts point to declining demand in the textile sector, both in Indian and global markets, as a key factor destabilizing cotton prices. This demand contraction has allowed private buyers to offer lower rates, knowing that farmers have limited alternative purchasing options.
The entry of CCI cotton procurement MSP operations is expected to improve market rates by establishing a price floor. When the government agency enters the market, private buyers typically adjust their offers upward to remain competitive and secure adequate supplies.
Revolutionary Kapas Kisan App Launch
Official sources have confirmed that the ‘Kapas Kisan’ app, a new mobile application developed specifically by the CCI, has been launched to ensure transparent and seamless procurement of the cash crop. This technological innovation supports the CCI cotton procurement MSP operations with digital efficiency.
The CCI has extended the registration opportunity through October 31, providing farmers ample time to enroll in the system. The mobile app empowers farmers with self-registration capabilities, slot booking functionality, and payment tracking features. According to officials, “This app provides the facility of payment tracking by farmers – bringing greater transparency, convenience, and speed to the cotton procurement process.”
Procurement Statistics and Below-MSP Sales
Mandi board data reveals a concerning trend: of the total cotton crop arrived so far, 46% or approximately 13,000 quintals has been purchased below the MSP. This statistic underscores the urgent need for the CCI cotton procurement MSP intervention to protect farmer interests and establish fair market prices.
Of the 30,000 quintals that arrived by September 29, private players purchased 28,000 quintals, with nearly half of these transactions occurring below the government-mandated support price.
Cultivation Area and Production Estimates
This year, cotton was sown across 1.19 lakh hectares in Punjab. The state agriculture department initially estimated production at 2.80 lakh bales, equivalent to 12.45 lakh quintals, according to CCI officials managing the cotton procurement MSP operations.
However, Mukul Tayal, president of the Indian Cotton Association Limited (ICAL), provided a more conservative estimate. “As per our estimation, Punjab will produce 1.50 lakh bales or 6.67 lakh quintals of cotton as the rains damaged prospects of a good yield,” Tayal explained.
Weather Impact and Future Outlook
Unseasonal rains severely affected the cotton crop, according to industry associations. Tayal noted that “Cotton is being paid less in the initial stage as the crop brought to market has moisture content due to untimely rains. We expect that CCI will play an important role in stabilizing the downward trend of rates by the private players.”
The CCI cotton procurement MSP mechanism typically enters the market precisely when private buyers pay less than the MSP, providing a safety net for farmers and ensuring price stability throughout the procurement season.
