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Cotton exports ban: Gujarat chief minister Narendra Modi seeks explanation from Centre

In a strongly-worded letter to PM, Gujarat chief minister Narendra Modi demands to know why decisions of such importance were taken without consulting the affected states.

Mail Today Bureau   New Delhi     Last Updated: March 6, 2012  | 14:54 IST

Gujarat chief minister Narendra Modi on Monday dashed off a letter to the Prime Minister protesting the ban on cotton exports announced by the Central government. In a strongly-worded letter, Modi has said that the Centre must refrain from "playing" with the economic interests of farmers of Gujarat, and demanded to know why decisions of such importance were taken without consulting the affected states.

"Such arbitrary decisions affect the economic interests of Gujarat cotton farmers the most. Immediately, revoke the ban imposed by the government of India on cotton exports," Modi said in his letter to the PM. "Does the Centre have no regard for the rights of state farmers? By prohibiting the export of cotton, the UPA government is trying to make Gujarat farmers into paupers. This conspiracy by the UPA government against Gujarat farmers will cost the UPA dear," he further said.

Modi has pointed out that last year, a similar decision by the government cost farmers of Gujarat Rs 14,000 crore and a policy reversal at a later stage caused further losses when farmers were forced to sell their cotton at throwaway prices. "The Shankar variety of cotton from Gujarat must be kept out of the purview of such policies as it has a huge international demand. Gujarat contributed 116 lakh bales of cotton out of the 365 lakh bales India produces annually.

When such a ban was imposed last year, China took great advantage of this move when the immense profits could have easily gone to the Indian farmers," Modi added.

This is the third objection by the chief minister to a policy decision of the Central government after National Counter Terrorism Centre (NCTC) and the changes in Railway Protection Forces (RPF) Act.

Although the Directorate General of Foreign Trade (DGFT) in the ministry of commerce announced the ban with immediate effect, agriculture minister Sharad Pawar was unaware of the move.

Pawar told reporters, "I have not heard about it and I am coming to know about it from you." Explaining the rationale for the ban, the textile ministry, which is also under the additional charge of commerce and industry minister Anand Sharma, said the decision was taken in view of exports in the current marketing year (October-September) exceeding the surplus by 10 lakh bales. Exportable surplus for year was pegged at 84 lakh bales.

Besides, the sudden rush for registration of export contracts was indicative of hoarding by Indian traders abroad, it said. In some cases, letter of credits have been registered where the name of exporting and importing party is the same. This is indicative of a tendency of hoarding in bonded warehouses abroad.

A US Department of Agriculture report has lowered India's cotton production estimates by about 7.5 lakh bales to 342.5 lakh bales during the current marketing year (October -September).

One bales contains 170 kg of cotton. In 2010-11, India's cotton production was 33 million (330 lakh) bales. The forecast has been downsized due to an estimated lower production in Maharashtra, where weather conditions have been less than favourable for the crop's growth. India, the world's secondlargest cotton producer, has already exported 85 lakh bales as against 70 lakh bales last year. Textile mills consumption estimate has been revised up to 216 lakh bales for the current season from 210 lakh bales.

Courtesy: Mail Today 

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