Procurement of Kapas

As a premier organisation in Public Sector and engaged in marketing of cotton, CCI acts as a role model in the procurement of kapas (seed cotton) through auction conducted by the APMCs, in the notified market yards. CCI officials attend these auctions regularly from day one of the arrivals and remain present throughout the season till viable arrivals last in the markets. Regular presence as well as regular purchases by CCI in these markets, help in creating a competitive environment to the advantage of cotton farmers in realizing price in commensurate with quality of their kapas produce. All kapas quantities are purchased in the auction and in competition with private buyers/traders and mills under close supervision of APMC Officials. Over the years, with PAN India presence through more than 400 procurement centres in all the major cotton growing regions, CCI has become a friend to cotton farmers and “One Stop Shop” for good quality Indian cotton for textile mills. All these purchases are made either under Minimum Support Price operations or under commercial operations.

 

Price Support Operations:

Every year, before commencement of the Cotton Season (Oct. to Sept.), Govt. of India fixes the Minimum Support Price (MSP) of seed cotton (kapas) with a view to safeguard the economic interest of cotton farmers in case the kapas prices fall below the MSP level.

CCI as a nodal agency of Government of India, undertakes Minimum Support Price (MSP) operations strictly as per guidelines issued by Government of India, in the event prices of Fair Average Quality (FAQ) grade kapas fall below the MSP level.

The MSPs of different varieties are fixed for FAQ grade kapas stipulating minimum quality parameters on staple length and mic value. This helps the cotton farmers in selling their kapas produce under MSP operations and avoid distress sales. Corporation keeps itself ever ready to meet the eventualities of support price operations in all the cotton growing States. Depending upon the intensity of these operations, Corporation creates required infrastructure in the form of regular procurement centres as well as satellite centres so that farmers are not compelled to travel long distances for selling their kapas produce. Processing of kapas through satellite centres, is arranged by CCI at the nearest processing points.

Procurement of kapas through the MSP mechanism has benefited the cotton farmers of the country, in a big way through assured price for their kapas produce as well as timely payments and it has helped in retaining their interest in cotton cultivation.

The steps involved in procurement of kapas from farmers in APMC are as under:

  • Farmers bring their kapas to nearest APMC yards for selling the same.
  • Kapas is sold by way of Open Auction/e-NAM in APMC yards.
  • Proper identification of farmers is being made by APMC Officials on the basis of their land records, aadhar cards, bank details etc. In this regard, State Govt. of Telangana has introduced bard-coded ID’s to farmers and State Govt. of Andhra Pradesh has developed web portal for identification of farmers.
  • CCI Officials remains in the market from the beginning of cotton season till end and keep close watch on prevailing market situation so as to protect the interest of cotton farmers.
  • In the event prices of Fair Average Quality (FAQ) grade kapas fall below the MSP level, CCI procures the entire quantity of FAQ grade kapas offered to it by Farmers in APMC at MSP.
  • Before procurement of cotton under MSP, proper quality assessment for FAQ grade parameters (i.e. Moisture content, Staple Length & Micronaire) are ensured and proper deductions are made towards below FAQ parameters as per MSP guidelines.
  • To ensure quality based remunerative prices to the cotton farmers, CCI started instrument based quality evaluation system for assessing of quality of kapas by using portable moisture meters and micronnaire testers.
  • After auction bidding slip is generated and weighment of kapas is conducted in presence of farmers, APMC officials and CCI Officials.
  • APMC provide the duly authenticated Takpattis (with digital signature)/purchase bill and banking details of the farmers to CCI.
  • Payment to cotton farmers are made 100% through online directly in farmers’ bank account in a period of 2-3 days after receipt of purchase bill along with details of farmers from APMCs.

 

State-Wise MSP Operations:

State

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20*

Punjab

1043814

86597

 

 

 

 

127722

 

 

 

 

355957

Haryana

255342

21763

 

 

 

 

79903

 

 

 

 

621431

Rajasthan

155217

4495

 

 

 

 

87870

 

 

 

 

375038

Gujarat

1236114

162

 

 

 

 

666457

51501

 

95105

7983

1100488

Maharashtra

1997091

509

 

 

41572

 

1763192

116799

 

14647

195751

2502881

MP

736526

 

 

 

3551

 

281875

29104

 

7797

50923

429871

Telangana

 

 

 

 

 

 

3690948

595159

 

263491

777026

4178885

AP

3275754

445589

 

7570

2174886

40813

1755559

39967

 

6497

4718

226896

Karnataka

163123

4763

 

 

16363

 

139280

 

 

297

8117

323823

Tamil Nadu

 

 

 

 

 

 

 

 

 

352

253

4512

West Bengal

132

137

152

124

262

 

 

368

465

 

147

 

Orissa

71717

16581

 

 

50051

 

102987

11633

 

1991

25454

160

Total

8934830

580596

152

7694

2286685

40813

8695793

844531

465

390177

1070411

10280440

MSP prices:

Variety

Staple length in mm

Micronaire value

2019-20*

Short Staple (20mm & below)

 

 

 

Assam Comilla

--

7.0-8.0

4755

Bengal Desi

--

6.8-7.2

4755

Medium staple (20.5mm-24.5mm)

 

 

 

Jayadhar

21.5-22.5

4.8-5.8

5005

V-797/G.Cot.13/G.Cot.21

21.5-23.5

4.2-6.0

5055

AK/Y-1(Mah./MP)/ MCU-7(TN)/SVPR-2 (TN)/ PCO-2 (AP & Kar)/ K-11(TN)

23.5-24.5

3.4-5.5

5105

Medium Long Staple (25.0mm-27.0mm)

 

 

 

J-34(Raj)

24.5-25.5

4.3-5.1

5255

LRA-5166/KC-2(TN)

26.0-26.5

3.4-4.9

5355

F-414/H-777/J-34 Hybrid

26.5-27.0

3.8-4.8

5405

Long Staple (27.5mm-32.0mm)

 

 

 

F414/H777/J-34 Hyb Pjb

27.5-28.5

4.0-4.8

5450

H-4/H-6/MECH/RCH-2

27.5-28.5

3.5-4.7

5450

Shankar-6/10

27.5-29.0

3.6-4.8

5500

Bunny/ Brahma

29.5-30.5

3.5-4.3

5550

Extra Long Staple (32.5mm & above)

 

 

 

MCU-5 /Surabhi

32.5-33.5

3.2-4.3

5750

DCH-32

34.0-36.0

3.0-3.5

5950

Suvin

37.0-39.0

3.2-3.6

6750

*as per Order No.1/20/2019-20/MSP/Cotton/15-43 dated 19th September 2019 issued by the Office of the Textile Commissioner

Commercial Operations

Besides MSP operations, to fulfill the raw material requirement of the domestic textile industry, CCI also undertakes viable commercial purchase operations as and when required. These commercial operations are basically dovetailed to indents and expected immediate demand from the mills under institutional sector as well as private sector. The main aim of these operations is to meet at least the annual cost of the minimum infrastructure maintained by the Corporation for Price Support operations. Here again, CCI Officials operate in the market in competition with other buyers including private trade and mills, by paying competitive prices for purchases of kapas from the cotton growers. For the benefit of the cotton growers, CCI makes purchases at an accelerated pace when market rules easy and slows down when prices are higher, so as to bring about necessary stability and give a desired direction to the ruling market prices. In addition to this, purchases are made simultaneously for all grades of kapas so that cotton farmers can sell their produce without any difficulty and realize the sale price in commensurate with the quality of their produce. Even though the commercial operations are undertaken depending upon its commercial viability, still it helps the interest of the cotton growers through stabilization of kapas prices.

Details of State-wise Commercial Operations

State-Wise CP Operations:

Quantity in bales

State

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2016-17

2017-18

2018-19

2019-20

Punjab

78976

1604

9731

100784

11755

18436

70267

 

12100

300

2100

Haryana

19441

3124

10009

72601

 

6824

11842

 

20800

100

400

Rajasthan

69653

 

24397

97626

4882

20797

16690

902

45400

100

1100

Gujarat

130058

 

22912

234410

217443

1846

75476

8227

75653

 

 

Maharashtra

379320

 

104062

427378

54998

 

85744

56990

100788

3100

1100

MP

37935

 

5221

51852

875

54

199

523

11113

 

1050

Telangana

 

 

 

 

 

 

 

34267

244118

 

 

AP

29882

 

 

341406

41743

 

130389

4805

66535

 

 

Karnataka

17854

202

2448

21331

3956

 

6685

 15900

80500

5900

400

Tamil Nadu

119

 

 

 

 

 

 

 

 

 

 

West Bengal

6288

 

 

18597

 

 

185

 

352

 

 

Orissa

 

 

 

 

4959

 

4583

3549

23608

 

 

Total

769526

4930

178780

1365985

340611

47957

402060

125163

680615

9500

6150

 

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