GoM approves further 10 lakh bales cotton export

The Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee today took a decision on allowing 10 lakh bales export of cotton beyond the earlier ceiling of 55 lakh bales for the current season. The GoM included Agriculture Minister Sharad Pawar, Commerce and Industry Minister Anand Sharma and Textiles Minister Dayanidhi Maran.

The Central Government was under pressure from various quarters to raise the limit for exports and a decision on this arrived at the meeting on Wednesday.

The government had put a cap of 55 lakh bales (170 kg each) on natural fibre exports for the 2010-11 season in the name of protect domestic textiles industry in the wake of rising prices of the raw material.

It should be mentioned that in a letter (dated 16 May) written to Prime Minister Manmohan Singh, Chief Minister Narendra Modi had demanded to lift the ban on cotton export from the immediate effect to save the farmers of Gujarat from financial loss. He had also demanded to immediately allot an export quota of 10-lakh bale of cotton to the State as a special case.

Gujarat is producing one third of cotton in the country and 50% of it is exported. Gujarat cotton is well-known in the international markets for its superior quality. Cotton was cultivated in 16-lakh hectare land in 2003 which has increased to 24.64-lakh hectare now. Gujarat farmers have produced 104.55-lakh bale cotton this year compare to the 74-lah bale in last year. And banning the cotton export in this scenario will financially ruin the farmers of Gujarat, Chief Minister wrote.

Chief Minster had described the Centre’s strategy of banning cotton export as an anti-farmer policy and had said, “it is a game to demoralize the cotton producing farmers of Gujarat. In 2010, Union Finance Ministry even slapped an export duty of Rs.2500 per ton on cotton and also issued a notification regarding it on April 9, 2010″.

Modi had also said in his letter, ” our farmers do not have any mechanism for the storage of cotton and now are compelled to sell their crops on low prices. Prices of various varieties of cotton have decreased by up to 50% in the current season.The ban has caused disappointment among the cotton producing farmers as they are suffering financial loss and so the Center should immediately allow the State an export quota of 10-lakh bale of cotton.”

Congress President Sonia Gandhi’s political secretary Ahmed Patel and Gujarat state Congress President Arjun Modhwadia had also sent letter demanding cotton export to the Prime Minister within last 15 days.