The critical need of the hour is not to allow dislodging of marketing system. We should have flexible, reasonable, market relevant and appropriate MSPs through a consultative process with all the stakeholders and protect “Cotton Welfare”.

Cotton is a globalised commodity and needs to have relevance and reference to the International price indicators. When the current MSPs were announced in September, 2008 by the Government, the NYBOT prices were hovering around U.S.Cents 70 per lb., preceded by as high a level as around 90 cents per lb. in March 2008. However, the prices thereafter have receded to as low as 45 cents per lb. (even the global oil prices have moved downwards substantially).

We believe that the conventional method of cost plus reasonable profit while fixing the MSPs have proved to be quite effective through which remunerative prices to the farmers were ensured with reasonable profits.

Further, open market policies and the marketisation system have worked effectively well. CCI commendably, selectively and needfully intervened to keep the prices on course and in tune through MSP operations. The market functioned smoothly and the gains of such effective marketing percolated directly to the farmers.
Cotton Association of India strongly feels that current MSPs appear to have been fixed on different tenets and have remained inexplicable to us.

We strongly appeal once again to the Government to kindly consider a consultative review and revision of the MSPs so as to protect the welfare and smooth functioning of all the segments of cotton economy.

P. D. Patodia
President

Mumbai,
1st November, 2008