Cotton prices are approaching Rs 9,000, but farmers are still in trouble and traders also appear to be under pressure.
In Jalgaon, cotton prices have been continuously increasing for the last few weeks and have reached Rs 8,500 to Rs 9,000 per quintal. In some places, even higher prices are being received for good quality cotton. At first glance, this seems to be a news of relief for the farmers, because the prices are above the minimum support price, but the ground reality is different and worrying.
A large quantity of cotton had come into the market at the beginning of the season, due to which the prices at that time remained between Rs 7,000 and 7,500 per quintal. Now the stock in the market has reduced, while the demand from mills and traders remains constant. Due to this imbalance of demand and supply, prices are rising.
The competition for purchasing among traders has increased and tough competition is being seen in auctions at many places. Experts believe that the prevailing domestic and international market conditions, production shortfall, export demand and growing needs of the yarn industry—all these factors may push the prices higher further.
But the real question is how much benefit the farmers are getting from this rising price. The reality is that most of the farmers had already sold their crops at low prices. Due to financial pressure, compulsion to repay loans, household expenses and lack of storage, they were not able to hold their produce for long.
Now that prices have increased, farmers have no cotton left to sell. In such a situation, the direct benefit of this boom is being given to the traders, middlemen and stockists, who had already stored the cotton and are now earning profits by selling it at higher prices.
This situation exposes the fundamental flaws of the agricultural system. On one hand the market is booming, on the other hand farmers are deprived of it. The hard-working farmer faces losses, while profits are limited to the middle players in the market.
To solve this problem, it is very important to provide better storage facilities to the farmers. Modern warehouses and cold storages should be developed in villages, so that farmers can preserve their produce till the right time.
Along with this, loans should be easily available to farmers at low interest rates, so that they are not forced to sell their crops immediately. There is also a need to increase market transparency, strengthen digital platforms like e-NAM and empower farmer producer companies. With this, farmers can get better prices for their produce by directly connecting with the market.
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