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  Indian cotton production: Current scenario

Cultivation of hybrids, Bt cotton varieties, latest production technology and plant protection technologies, adoption of scientific and agronomic practices by farmers, increase in area under irrigation, Government policies on R&D and price support, are all responsible for the present drastic changes of Indian cotton scenario to its present position, asserts Supriya Pal.

Cotton is a natural fibre of vegetable origin, like linen, jute or hemp and composed of cellulose. Cotton is the fruit of cotton plant. The cotton is a variety of plants of the genus Gossypium, belonging to the Malvacae family.

Out of about 50 species of cotton plants in the world, only four have been domestically cultivated for cotton fibres. Gossypium hirsutum and Gossypium barbadense are the most commonly cultivated species of cotton in the world. Gossypium hirsutum variety is the most important agricultural cotton, accounting for more than 90% of world fibre production.

The first cotton fabric dates back to approximately as early as 3,200 BC, as per evidence from the excavation and by fragments of cloth found at the Mohenjo-Daro archaeological site on the banks of the River Indus. The cultivation and manufacturing of cotton fabric had been practised in India since pre-historic times. From India, cotton textiles probably travelled to Mesopotamia. The trade in cotton is assumed to have been started around Rome at the time of Alexander the Great, in the 4th century BC.

Cotton textile manufacturing resumed in India under the influence of Mahatma Gandhi. Mahatma Gandhi portrayed while spinning cotton with a wheel is still an outstanding symbol in the collective unconscious.

World cotton scenario
Cotton is an important natural fibre of the 20th century. Major growth of cotton production was observed since the end of the Second World War (WWII). Cotton was grown in 90 countries during the year 2007. During 2006/07, four major cotton producing countries were China, India, the USA and Pakistan, which accounted for approximately three-quarters of world's cotton production.

World cotton area and yield
The area under cotton production in the world are estimated at around 30-31 million hectares (Table 1). The major cultivators of cotton in the world are America, India, China, Egypt, Pakistan, and Eastern Europe. India has the largest area under cotton production. China is the largest producer of cotton in the world, whereas India is the second largest. Interestingly, China with almost half the area under cotton production compared to India, but produces more than 2˝ times yield (kg per hectare) of cotton as compared to India.

World cotton consumption
World cotton consumption has increased with 2% average annual growth rate since 1940s. Developing countries consumed a major proportion of global cotton output since the end of WWII. The share in global consumption of developing countries has become even more significant since 2000s.

As per ICAC figures, the global cotton consumption of developing countries was approximately 78% of global cotton consumption between 1981and 1999. Their ratio has been above 80% since 2000. In 2010 they are expected to absorb almost 94% of global cotton output.

World cotton production, export and import scenario
The current world production is estimated (2009 - 10 Dec) at 102.7 million bales (Table 2). This is the lowest since 2003/04 and it represents a 14.3% decrease relative to 2007/08 and a 4.4% decrease relative to 2008/09. Global cotton consumption increased by 988,000 bales (from 113.5 million bales to 114.5 million). The cotton consumption increased for China (+500,000), India (+250,000), Vietnam (+150,000), and Uzbekistan (+100,000).

As per latest report of USDA, the production of cotton decreased by 24,000 bales (2009 - 10 Dec as compared to 2009 - 10 Nov). Country-wise report includes India (-450,000 bales) and Peru (-150,000); Pakistan (+400,000 bales) and the United States (+96,000). Due to the reduction in cotton production in the world and increase in world cotton consumption have resulted in expectations of a 11.8 million bale production/consumption gap in 2009/10, which represents 11.5% of production, 10.3% of consumption, and 22.7% of ending stocks.

The world production/consumption gap may impact on prices and at the country level this may impact on trade patterns. China’s 2009/10 production is 14.2% lower than in 2008/09 whereas the Chinese consumption is anticipated to increase 3.9%. Hence, it is expected that China will import almost 2 million more bales in 2009/10 (9.0 million) than in 2008/09.

Since 2004/05, the United States is the world’s largest cotton exporter. However, India has been rapidly gaining export market share. Today India, with ample stocks and higher production, is expected to continue to expand its share of the global export market. China having only half the area of cotton production as compared to India, produces one and-a-half times more cotton, has one-and-a-half times the world market share and three times the yield.



Indian cotton scenario
India was recognised as the cradle of cotton industry for over 3000 years (1500 BC to 1700 AD). India produces finest and beautiful cotton fabrics since time immemorial. India, being the earliest country in the world for domesticated cotton production and manufacture of cotton fabrics, has led today’s first in cotton cultivated area and second in production among all cotton producing countries in the world next to China (as per production record in 2009 - 10).

India is the 15th largest economy in the world with a GDP of USD3.319 trillion and a GDP per capita of USD2,900. In 2008, the textile sector contributed about 14% of industrial production, 4% of the GDP and provided direct employment to over 33 million people. The textile sector is the second largest provider of employment after agriculture.

Cotton is one of the principal crops of India and plays a vital role in the country’s economic growth by providing substantial employment and making significant contributions to export earnings. The cotton cultivation sector not only engages around 6 million farmers, but also involved another about 40 to 50 million people relating to cotton cultivation, cotton trade and its processing.

There are four major cotton species of cultivated cotton, of which two are diploid (Gossypium arboreum and G herbaceum) and the other two tetraploid (G hirsutum and G barbadense). India is the only country to grow all four species of cultivated cotton. In addition, hybrid cotton, which is produced from crossing tetraploid species G hirsutum are also cultivated in the central and southern zones. The diploid species referred to as the ‘Desi’ cotton, having low productivity and low quality cotton, contributes 25 - 30% of the country production. The tetraploids variety contributes remaining 70% of the cotton production in India. These varieties have fine quality fibre, and are normally used by the textile industry.

India produces a large number of cotton varieties and hybrids. Although there are more that 75 number of varieties in cotton cultivation, but 98% of the production is contributed by about 25 varieties. As of 2009/10, India is the second largest cotton producer and consumer (Table 1 & 2). The textile industry accounted for 14.4% of the country’s export earnings as of 2008.

The Government of India fixes the Minimum Support Price for cotton and in this price several government agencies like Cotton Corporation of India and Maharashtra State Co-operative Cotton Growers' Marketing Federation procure cotton.

India is the second largest exporter of cotton behind the US. India’s exports reached 751000, 994000, 1531000, 514000 and 1481000 tons in 2005/06, 2006/07,2007/08,2008/09 and 2009/10 (Data source: USDA). Major export destinations are Bangladesh, Pakistan, China (Mainland) and other Far-east countries.

India’s imports reached 520,000 tons in 2001/02, but dropped due to the heavy expansion of domestic cotton industry. However as of July 2008, the Indian government abolished the duty on cotton imports into the country. This boosts the imports to 130,000 tons in 2008/09.

During 1947 - 48, mostly short and medium staple cottons were produced in India. Today, India produces the widest range of cottons. Till 1978 - 79, the import of Egyptian and Sudanese long and extra long staple cotton was a regular phenomenon. But today India not only became self sufficient for own cotton requirement, but also became a leading exporter of cotton globally.

Indian cotton production zones
The planting period of cotton normally is from March to September, while the harvesting period is from October to February. There are mainly three cotton-producing zones in India, such as:
* Northern zone (Hirsutum and Arboreum Zones), comprising Punjab, Haryana and Rajasthan.
* Central zone (Hirsutum, Arboreum, Herbaceum and Hybrid Zones), comprising Maharashtra, Madhya Pradesh and Gujarat.
* Southern zone (Hirsutum, Arboreum, Herbaceum, Barbadense and Hybrid Zones) comprising Andhra Pradesh, Karnataka and Tamil Nadu.

About 70% of total cotton are produced in Gujarat, Maharashtra and Andhra Pradesh ( Table 4). The northern region produces short and medium staple cotton, the southern region normally produces long staples cotton, while the central region produces long and medium staples. The peak marketing season for the crop is during November to March.

Cotton production in Indian States
It is clear from this Table that in 2009 - 10 the highest cotton-producing State in India is Gujarat (95 lakh bales), followed by Maharashtra (67 lakh bales).

The Table 5 shows the progress of cotton production and yield of cotton in the country over the last 10 years. It is clear that cotton production over the last 10 years has increased more than 89%, from 156 bales in 1999-00 to 295 bales in 2009 - 10. The cotton yield (kg per hectare) has been increased from 304 in 1999 - 00 to 526 in 2008 - 09, ie more than 79%. In 2008 - 09, the yield of cotton is highest in Tamil Nadu (708 kg per hectare) followed by Andhra Pradesh (670 kg per hectare).

Area in total North zone, Central zone and South zone are 15.00, 67.73 and 18.01 lakh hectares respectively during 2009 - 10.

Cotton consumption
The textile industry in India is one of the largest industries in the country . During the last two decades, there is a phenomenal growth in this sector in terms of installed spindle and yarn production, installation of open-end rotors and setting up of export-oriented units. The growth and modernisation of the spinning industry has led to a substantial growth in cotton consumption. After achieving sustained growth in cotton consumption during the Tenth Plan period, domestic cotton consumption increased by about 7 per cent in the year 2005 - 06, by around 9 per cent during 2006 - 07, and by around 6 per cent in 2007 - 08.

The mushroom growth of spinning industry and its modernisation has led to sustained growth in cotton consumption. After achieving a substantial growth in cotton consumption during Tenth Plan period, mill cotton consumption increased by about 7% in the year 2005 - 06, by around 9% during 2006 - 07 and by around 6% in 2007 - 08.

Development in Indian cotton cultivation and Government initiatives
Development of Indian cotton cultivation can be categories into five major phases, such as:
* Expansion of area under cultivation.
* By intensive cultivation with introduction of high yielding varieties.
* By steady increase in both area and productivity.
* By stagnation in area under cultivation, decline in productivity, production and irrigation coverage at 1996 - 97 levels.
* By resurgence of the cotton sector from 2003 04 onwards.

The Indian government has been actively participating in the growth of cotton industry and government agencies like Cotton Corporation of India (CCI) and state marketing federations, committees and institutions like Genetic Engineering Approval Committee (GEAC) and the Central Institute of Cotton Research (CICR) play an active role in the development of cotton industry.

The Indian cotton cultivation sector has not only been increasing its productivity, but also has ben undergoing a drastic improvement in terms of quality of cotton. Cultivation of hybrids, Bt cotton varieties, latest production technology and plant protection technologies, adoption of scientific and agronomic practices by farmers, increase in area under irrigation seed, Government policies such as giving greater force to research and development in cotton, encouraging use of quality seeds and pesticides and price support, are all responsible for the present drastic changes in Indian cotton scenario. But India still has to go long way to catch up with the world average yield of 735 kg per hectare as of 2009 - 10 . India’s yield position as of today is only 505 kg per hectare.

Today both cotton exports and imports are under Open General License (OGL). In order to boost cotton exports, duty drawback incentive of 1% was in vogue. Again from 8th July, 2008 the Government of India has withdrawn the duty drawback incentive on cotton exports. Similarly, till 8th July, 2008 an import duty of 10% was in vogue. From 8th July, 2008 the Government of India has removed import duty of 10% along with special countervailing duty on imports of cotton.

The Cotton Corporation of India Limited (CCI)
CCI was established on 31st July 1970 as a Government Company registered under the Companies Act 1956. As per the Policy, the CCI is nominated as the Nodal Agency of Government of India, for undertaking Price Support Operations, whenever the prices of kapas (seed cotton) touch the support level. The role assigned to the CCI under the Textile Policy directives from the Ministry of Textiles, Government of India in 1985 was:

• To undertake price support operations, whenever the market prices of kapas touch the support prices announced by the Government of India, without any quantitative limit.
• To undertake commercial operations only at CCI's own risk.
• To purchase cotton to fulfil the export commitments.
• To act as implementing agency for Mini Missions III & IV of TMC.

As a Nodal Agency of Government of India to undertake price support operations, Corporation keeps itself in preparedness to meet the eventualities of price support operations. As and when kapas prices touch the level of Minimum Support Price (MSP), kapas purchases are made under MSP operations without any quantitative limits. Under these MSP operations, cotton farmers are free to offer their kapas produce to CCI , which continues purchases of such kapas till the prices rule at MSP level.

When the kapas prices start ruling above MSP level, the Corporation undertakes commercial operations at its own cost for supply of cotton to mills in the State sector as well as private sector.

As Implementing Agency for Mini Missions III & IV of Technology Mission on Cotton, CCI is striving its best to achieve the laid-down targets in respect of development of market yards and modernisation of ginning & pressing factories. These targets of IXth Plan period have already been achieved and the projects targeted through the Xth Plan period, are at different stages of completion.

The CCI Operations cover all the cotton growing States in the country comprising Punjab, Haryana and Rajasthan in Northern Zone; Gujarat Maharashtra and Madhya Pradesh in Central Zone and Andhra Pradesh; Karnataka & Tamil Nadu in Southern Zone as also in Orissa.

Due to the unprecedented hike of about 40 per cent by the Government in the minimum support price (MSP) for cotton during 2008 - 09, the Cotton Corporation of India (CCI) was procuring large quantity of cotton as the market prices ruled below the MSP. CCI procured 89.3 lakh bales of cotton from the different States in 2008 - 09. The Government retained the same MSP for 2009 - 10 .

Technology Mission on Cotton
Technology Mission on Cotton was launched in February, 2000 with the objective to increase cotton production, productivity and improvement in cotton quality, to increase the income of cotton growers and ensuring abundant supply of quality cotton to the textile mills. Since then, the TMC is being implemented through its four Mini Missions (MM) for achieving the above objectives. Mini Mission-I deals with the research and development of cotton production technologies and Indian Council of Agricultural Research (ICAR) is the nodal agency for its implementation. Mini Mission-II deals with extension & development activities for increasing production and productivity, which is being implemented by the Department of Agriculture & Cooperation. Mini Mission-IV is looking after the modernisation of ginning and pressing factories. The Mini Mission-III & IV are implemented by the Ministry of Textiles.

The broad objectives of the four Mini Missions are as under:
Mini Mission I
With the Indian Council of Agricultural Research (ICAR) as the Nodal Agency, this Mini Mission has the following objectives:
• Development of short duration, high yielding, disease and pest resistant varieties/hybrids with appropriate fibre parameters to meet the need of the textile industry.
• Development of integrated water and nutrient management practices for cotton and cotton based cropping system.
• Development and validation of Integrated Pest Management Technology for different cotton growing areas of India to improve yield and reduce the cost of cultivation to ensure better net return to the cotton growers.

Mini Mission II
With the Ministry of Agriculture and Co-operation as the Nodal Agency, this Mini Mission has the following objectives:
• Technology Transfer through demonstration and training.
• Supply of delinted certified seed by setting up of delinting units.
• Accelerating Integrated Pest Management activities.
• Providing adequate and timely information input to the farmers periodically.

Mini Mission III
The Ministry of Textiles is the Nodal Agency for this Mini Mission. It has the objectives of improvement of marketing infrastructure through setting up new market yards and activation/ improvement of existing market yards.

Mini Mission IV
The Ministry of Textiles is also the Nodal Agency for this Mini Mission. The objectives are: Modernisation and technological up-gradation of existing ginning and pressing factories so as to improve the processing of cotton.

Budgetary Provision /Release of funds
Funds released during the 9th, 10th and 11th five year plans are as under:-
During 9th five year plan : Rs 55.00 crore
During 10th five year plan: Rs 165 crore
During 11th five year plan: Rs 100 crore (the total outlay of the plan up 31.3.2009 is Rs 241 crore which includes NER)

References
1. http://ffymag.com/admin/issuepdf/Cotton-Oct09.pdf
2. http://www.pcotexport.com/cottonvarieties.html
3. http://r0.unctad.org/infocomm/anglais/cotton/market.htm
4. http://cotcorp.gov.in/
5. http://cotcorp.gov.in/national_cotton.asp
6. http://www.cotcorp.gov.in/technology.asp
7. http://www.indiaonestop.com/cotton/cotton.htm
8. http://www.cotcorp.gov.in/statistics.asp
9. http://www.mahacot.com/cotton.html
10. http://www.mahacot.com/pdfs/mktrep.pdf
11. http://www.mahacot.com/pdfs/nafedprice.pdf
12. http://www.mahacot.com/pdfs/ICAC-jan10.pdf
13. http://www.mahacot.com/pdfs/usdaDec09.pdf
14. http://www.mahacot.com/pdfs/Cai29122009.pdf
15. http://www.mahacot.com/pdfs/cottonfactsheet.pdf
16. http://www.cotcorp.gov.in/organisation.asp
17. http://texmin.nic.in
18. http://www.cottoninc.com/MarketInformation/MonthlyEconomicLetter/

Note: For detailed version of this article please refer the print version of The Indian Textile Journal March 2010 issue.

Mr Supriya Pal, Manager, TQM, Shri Lakshmi Cotsyn Limited, A7/A8 UPSIDC Industrial Area, Malwan, Fatehpur, Uttar Pradesh. Email: supriyapal@shrilakshmi.in.

published March , 2010
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