Cabinet clears ₹1,718 crore MSP support to Cotton Corporation of India for 2023-24 season

The Cabinet Committee on Economic Affairs on Wednesday approved Minimum Support Price (MSP) funding of ₹1,718.56 crore to the Cotton Corporation of India (CCI) for the 2023-24 cotton season to provide direct price support to farmers.

MSP operations are undertaken when market prices fall below the government-fixed support price, helping prevent distress sales and stabilise prices in the market.

Cotton, a major cash crop, supports the livelihoods of about 60 lakh farmers in the country and an estimated 4-5 crore people engaged in related activities such as processing, trade and textiles.

During the 2023-24 season, the area under cotton cultivation was estimated at 114.47 lakh hectares, with production pegged at 325.22 lakh bales, accounting for nearly a quarter of global output.

“Around 33 lakh bales of cotton were procured out of the total production to stabilise prices and prevent losses to farmers,” Union Minister Ashwini Vaishnaw said at a Cabinet briefing. “To support this, the Cabinet has now approved reimbursement of the expenditure incurred by the CCI.”

The government fixes MSP for seed cotton based on the recommendations of the Commission for Agricultural Costs and Prices.

CCI, the designated nodal agency for cotton procurement, purchases all fair average quality cotton from farmers without any quantitative ceiling whenever prices fall below MSP.

"Overall, farmers received support of about Rs 11,700 crore, and CCI has been reimbursed ₹1,118 crore,” Vaishnaw said.

CCI has set up a network of over 508 centres across 152 districts in 11 major cotton-growing states to facilitate procurement.

The corporation has also introduced technology-driven initiatives such as the Bale Identification and Traceability System and the “Cott-Ally” mobile application to improve transparency, outreach and efficiency in MSP operations.