Govt considering merger of Cotton Fedn with Markfed

19-04-14

Cotton Federation opposes the move and wants the Government to let it explore avenues other than cotton procurement to become financially viable again

By Kartik Lokhande
Maharashtra State Co-operative Cotton Growers’ Marketing Federation Limited (MSCCGMF or popularly known as Cotton Federation), which has been hitting the nadir in cotton procurement over the last few years, is facing a new challenge now.
Maharashtra Government is considering the proposal to merge Cotton Federation with Maharashtra State Marketing Federation (Markfed). However, Cotton Federation has opposed the move and has requested the Government to let it explore other avenues of revenue generation than cotton procurement.
Formed in the year 1984 to implement the Monopoly Cotton Procurement Scheme (MCPS), the Cotton Federation has been procuring cotton from farmers at the Minimum Support Price (MSP). According to the officials, cotton procurement at MSP has protected the farmers from selling cotton to private traders at lower rates. However, in the past few years, the traders are offering price higher than the MSP. As a result, cotton-growers have not shown much of interest in selling cotton to Cotton Federation. Over the years, the number of employees with the MSCCGMF has come down from 6,000 to 326 only. Against this backdrop, the State Government is thinking over the proposal to merge the Nagpur-headquartered Cotton Federation with Markfed.
Sources said that the move is a conspiracy against cotton-growers. “Cotton Corporation of India (CCI) and NAFED procure cotton at MSP. Cotton Federation also works on the same principle to protect farmers from market’s vagaries by offering them an assured price. Hence, revenue and expenditure gap in this case cannot be treated as deficit,” said an official.
Another senior officer said that if Cotton Federation ceased to exist and was merged with Markfed as proposed, the private traders might come together and bring down cotton prices in the market. Then, the farmers would have no other option than to sell cotton at lower-than-expenditure price being offered in the market. This would lead to exploitation of cotton-growers, he added. If the Government was concerned about expenditure on staff, it could very well use the technical expertise of 180 Graders in agricultural extension activities, said the source.
Dr N P Hirani, Chairman of MSCCGMF, told ‘The Hitavada’ that the Cotton Federation was opposed to the proposal of merger with Markfed. The proposal had come up as there was no or negligible procurement of cotton by Cotton Federation in past four years, he said. He said that the Cotton Federation had urged the Government to keep it alive and independent and not to merge with Markfed.
“We have requested the Government to let us explore some other avenues of revenue generation than cotton procurement. Already, we have launched the initiative of ‘Mahacot’ brand of seeds. We have also written to textile mills in the country to let us act as their agents for cotton procurement. This may generate revenue for Cotton Federation by way of commission paid by the textile mills,” he said. Further, he added, MSCCGMF had urged the Markfed itself to make available the latter’s business avenues to the former on commission basis.

Year-wise procurement of cotton and its value

----------------------------------------------------------

Year         Procurement                     Value

               (In lakh quintals)

---------------------------------------------------------------------

1984-84         88.52                       Rs 492.39 cr

1985-86         145.08                     Rs 815.83 cr

1986-87         63.03                       Rs 398.96 cr

1987-88         61.17                       Rs 477.94 cr

1988-89         57.13                       Rs 427.58 cr

1989-90         100.98                     Rs 790.70 cr

1990-91         65.84                       Rs 617.87 cr

1991-92         51.08                       Rs 570.13 cr

1992-93         94.77                       Rs 894.21 cr

1993-94         65.05                       Rs 936.40 cr

1994-95         52.08                       Rs 1,001.07 cr

1995-96         130.97                     Rs 2,539.81 cr

1996-97         149.83                     Rs 2,917.22 cr

1997-98         88.26                       Rs 1,695.80 cr

1998-99         120.48                     Rs 2,347.49 cr

1999-2000     175.98                     Rs 3,616.59 cr

2000-01         74.55                       Rs 1,559.57 cr

2001-02         155.18                     Rs 2,162.76 cr

2002-03         23.58                       Rs 481 cr

2003-04         0.03                         Rs 74 lakh

2004-05         211.65                     Rs 4,733 cr

2005-06         18.85                       Rs 336.39 cr

2006-07         32.65                       Rs 643.16 cr

2007-08         1.29                         Rs 26.05 cr

2008-09         167.94                     Rs 4,716.09 cr

2009-10         0.14                         Rs 4 cr

2010-11         Nil                           --

2011-12         Nil                           --

2012-13         0.12                        Rs 4.74 cr

2013-14         Nil                          --

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(Source: Maharashtra State Co-operative Cotton Growers’ Marketing Federation Limited)

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