Following the dismantling of the Maharashtra Monopoly Cotton Procurement Scheme, Maharashtra -- the largest cotton producer in the country -- has witnessed a spurt in the number of ginning and pressing mills.
The scheme was launched in 1972 to purchase cotton from the state's 30 lakh cotton farmers. The government dismantled the scheme and opened cotton markets to private traders, making marketing subject to the minimum support price.
"The new units are located in places like Sillod (Aurangabad), Gevrai and Majalgaon (Beed) and Jalna in Marathwada region and Pandharkawda in Vidarbha region," Sunil Porwal, Principal Secretary (Textiles), told
The government also received a proposal from an industrial group to start around 50 ginning pressing mills in
the state, Porwal said.
This was one of the biggest proposals to come through since the cotton monopoly procurement scheme ended, he added.
The government had recently announced a credit-based capital incentive/subsidy to promote ginning and pressing activities, particularly in existing units across Vidarbha, Marathwada and North Maharashtra.
The motive behind establishing the scheme was to capture total value-addition from cotton to cloth in favour of farmers, an official with the textiles department said.
For doing so, it was decided that cotton should be purchased only by the state. Movement of cotton out of the state was banned. As the scheme virtually placed a total ban on private cotton business across the state, it drove entrepreneurs out of the state.
Back then, the state was merely trading through the cotton federation -- which was the sole agent authorised to buy the commodity. So neither did the state do the required value-addition (converting cotton to cloth), nor did it allow others to do it as private trade in cotton was banned.
Many cotton traders moved to places like Sendhua in Madhya Pradesh and Adilabad in Andhra Pradesh, and carried out the trade from there by procuring cotton from Maharashtra, the official said.
"It makes no sense to transport cotton as it is a costly affair. Now, as the market has opened up in Maharashtra, we expect the cotton business to shift back to the state and the equired value addition will take place here," the official said, adding that it may require some support from the state.