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EconomicsSource: Hindustan Times

Amid Trump's tariffs, Centre to ramp up MSP cotton buys to shield farmers

Tuesday, 9 September 2025
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Key Points

The Union government is set to increase cotton purchases at federally-fixed Minimum Support Prices (MSP) to assist farmers facing price pressures amidst a 15-year low in domestic production. This initiative is crucial for UPSC aspirants as it relates to GS Paper 3, focusing on economic development and agriculture. Last Updated: 2025-09-09

Key Facts About Cotton MSP Initiative

  • Cotton is India’s most significant commercial crop, contributing about 24% of global production.
  • Approximately 67% of cotton cultivation is rain-fed, making it dependent on monsoon rains.
  • India is the second-largest producer and consumer of cotton globally.
  • The cotton industry sustains around 6 million farmers and 40 to 50 million workers.
  • Pest infestations have reduced cotton output to a 15-year low.
  • The Cotton Corporation of India stabilizes prices for farmers.
  • Government initiatives include the Cott-Ally Mobile App for real-time updates.
  • Measures to boost the industry include modernizing infrastructure and improving farmer services.

India's Agricultural Resilience Amid Global Challenges

The decision to ramp up MSP cotton buys is a strategic move to bolster India's agricultural sector against global economic pressures, such as tariffs imposed by major economies. Cotton, being a key export commodity, plays a vital role in India's foreign exchange earnings and economic stability. Strengthening the cotton industry aligns with India's goals of sustainable agricultural growth and rural development.

Related Government Schemes/Policies

  • Technology Mission on Cotton: Aims to enhance productivity and quality of cotton.
  • Cott-Ally Mobile App: Provides farmers with real-time updates on cotton prices and market trends.

UPSC Relevance

  • GS Paper 3: Economic Development - Agriculture, Major Crops, Cropping Patterns
  • Prelims Angle: Questions on MSP, Cotton Corporation of India, and global cotton production rankings.
  • Mains Angle: Essays on agricultural sustainability, impact of global trade policies on Indian agriculture.

FAQ Section

  • What is the MSP cotton initiative?
    The MSP cotton initiative involves the government purchasing cotton at federally-fixed Minimum Support Prices to protect farmers from market fluctuations.
  • Why is the MSP cotton initiative important?
    It is crucial for safeguarding farmer incomes amidst a 15-year low in cotton production and rising import pressures.
  • What are the key features of the MSP cotton initiative?
    Key features include government procurement at MSP, stabilization of prices by the Cotton Corporation of India, and support through the Cott-Ally Mobile App.

Detailed Coverage

  • Cotton is India’s most significant commercial crop, contributing about 24% of global production.
  • Approximately 67% of cotton cultivation is rain-fed, making it dependent on monsoon rains.
  • Cotton has historical significance, dating back to the Indus Valley Civilization.
  • Hybrid cotton is produced by crossing two parent varieties, while Bt Cotton is genetically modified for pest resistance.
  • India is the second-largest producer and consumer of cotton globally.
  • Cotton contributes significantly to foreign exchange earnings, with exports of 30 lakh bales in 2022-23.
  • The cotton industry sustains around 6 million farmers and 40 to 50 million workers.
  • Climate variability poses significant risks to cotton yields.
  • Many farmers rely on traditional methods, leading to low productivity.
  • Pest infestations have reduced cotton output to a 15-year low.
  • Rising input costs make cotton farming economically unsustainable.
  • Farmers face market access issues and often sell below MSP rates.
  • The Cotton Corporation of India stabilizes prices for farmers.
  • Technology Mission on Cotton aims to enhance productivity.
  • Government initiatives include the Cott-Ally Mobile App for real-time updates.
  • Measures to boost the industry include modernizing infrastructure and improving farmer services.
  • Strengthening initiatives for modern farming is crucial for sustainable growth.
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Practice Questions

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Considering the historical context of cotton cultivation in India, which factor most significantly contributed to the shift from India being a textile producer to a raw cotton supplier during colonial rule?