Hybrid Cotton seeds price cap

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Mr. Raja Vadlamani, Vice President-Supply Chain at Seedworks International Pvt. Ltd has penned down his views on the issue of price regulation on cotton seeds. Presenting below his article. Feel free to send your views to us.

The government has developed a taste for price regulation in cotton seeds.. Hardly had the controversy over the price capping in cotton died down .the MRP of a cotton hybrids can’t vary irrespective of it intrinsic value and no matter where the product is being retailed and how superior it is in delivering the value to the farmers..

This hinders the innovation and sustainability of the crop and cotton seed Industry as the current scenario is more a price driven rather than value driven. Regulatory should trade off between User farmer and Industry in order to not to be a constraint for bringing in the innovation and new genetics. By capping the price the end user might be less burdened by 100-200 INR per packet , but in the absence of new genetics flow and innovation the productivity crunch and loss could be 4500 per acre even a quintal less yield. So with the price cap How the visionaries can ascertain doubling farming income way forward.

For the last three years Indian cotton industry is maintaining the same MRP @ 800/- in spite of Inflationary upward movement of all the costs involved in the cotton supply chain. In view of this the industry is not in a position to support the producing farmers , innovation and new genetics. production farmer who is a crucial stakeholder of cotton supply chain is being ignored and at the same time companies are struggling to sustain and be viable.

To elucidate

  • Prices of agro chemicals like pesticides ,herbicides and fertilizers in the Indian market are shot up by 20% with rising global crude prices and shut down of many raw material factories in China, the world’s largest producer of agrochemical raw materials. //economictimes.indiatimes.com/articleshow/58301766.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
  • Diesel prices increased from 46/- (2016) to 70/- of current price is a significant contributor of inflation on the other hand.
  • Cotton seed production being a labour intensive activity , The labour wages have gone up from 160 to 300 impacting the production grower ( Source : Government of Telangana minimum agricultural wages act). .
  • Various other costs such as Research expenses packaging expenses and treatment expenses, and freight costs have gone up by close to 10% per annum since 2016.
  • In view of the above cost escalations cotton seed production is becoming nonviable to the seed growing communities and the companies.

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