New policy to end dependence of farmers on cotton export.

GANDHINAGAR: The Gujarat government has decided to come up with a new policy that would ensure that state's farmers do not have to depend on cotton export in order to earn a high price of their produce. Announcing this in the state assembly, state industries minister Saurabh Patel told the house that the government plans to come up with a scheme that would encourage the existing ginning mills to set up spinning facilities within their units in order to produce yarn.

A senior government official told TOI later that faced with glut, the state's cotton producing farmer either exports his produce or alternatively sells it to the ginning mills in Tamil Nadu, which have huge spinning facilities. "The yarn produced from the state's cotton, thus, returns to the state's textile mills, which use them for producing different varieties of cotton clothes," the official said.

Gujarat produces around 40 per cent of all cotton produced in the country. Of the total cotton produced in the state, which was approximately 114 lakh bales this year, more than 65 lakh bales is sent out of Gujarat, including to foreign countries. "Just about 30 to 35 lakh bales are used up and go to state's ginning mills, who, too, are forced to send the ginned cotton, after separating it from the seed, mainly to Tamil Nadu's spinning units," the official said.

Officials said as of today, not more than 10 per cent of the state's ginning units have spinning facilities. "These facilities would need to be enhanced drastically by encouraging them to set up around 25 lakh spindles to ensure that the cotton they receive is not exported out of Gujarat," they added.

"Spinning is a capital intensive affair. The state government plans to come up with a policy to provide capital incentive to the ginning mills. Minimum investment in plant and machinery to set up spinning facilities is Rs 30-35 crore, not a small amount for the ginning mills," an official said.

Significantly, the Gujarat government created a huge hue and cry and chief minister Narendra Modi wrote a strongly worded letter to Prime Minister Manmohan Singh when recently the Government of India imposed a ban on cotton export to "protect" the Indian textile industry sector. Modi characterized the ban as a machination jointly undertaken by corrupt Central politicians and textile barons from south India. The ban was later on lifted after a Congress delegation met the PM.

Ironically, insiders said Gujarat might want strong restrictions on the export of cotton once the new policy becomes forcefully effective and the spinning facilities, currently negligible, become rampant in the state.

Source : timesofindia.indiatimes.com