Market Observation: Industrial Cluster, Cotton Production In Punjab, India Faces Chronic Death

In Punjab, India, the Ministry of Agriculture set a target of 200000 hectares of cotton planting area this year, down from 300000 hectares last year. However, despite the target reduction, the government failed to achieve this goal.

With the end of the LokSabha election in 2024, the current situation of the Punjab Ministry of Agriculture is that the cotton planting in this state has reached a new historical low.

The planting period ended on May 31. This year, the planting area was only 96614 hectares, 46% less than 179000 hectares last year. Even if the Ministry of Agriculture lowered the target of cotton planting area this year from 300000 hectares last year to 200000 hectares, it failed to achieve it.

An official of the Ministry of Agriculture, who asked not to be named, said: "When local farmers were not ready to plant cotton, there was almost nothing to talk about. We lowered our goal, but we failed to achieve it."

In Punjab, the cotton output of Fazilka, Muktsar, Bathinda and Mansa accounts for 99% of the total output of the state, while that of Sanguru, Moga, Barnala and Faridkot is planted in a small area.

In Fazilka this year, only 50341 hectares of land were planted with cotton, compared with 92000 hectares last year. The cotton planting area in Muktsar area is only 9830 hectares, up from 19000 hectares last year. Bathinda also shows a similar trend. The cotton planting area is only 13000 hectares, compared with 28000 hectares last year. The area in Mansa decreased from 40250 hectares last year to 22502 hectares.

In 2022, the cotton planting area in Punjab will be 248000 hectares, 252000 hectares in 2021, 255000 hectares in 2020 and 335000 hectares in 2019. In the late 1980s, the cotton planting area in Punjab was about 800000 hectares.

After the Green Revolution, people turned to planting rice in many areas with easy access to water resources, which led to the slow reduction of cotton planting area. Only Malwa region continues to grow cotton. Because of the local water shortage and the majority of groundwater contains salt, it is not suitable for drinking.

In 2015, cotton crops were severely attacked by white flies. The cotton planting area was about 325000 hectares in that year, but serious losses were caused by insect pests, which triggered farmers' protests.

The Punjab government then announced that it would compensate farmers 8000 rupees per hectare that year. In the second year (2016), the cotton planting area decreased slightly to 295000 hectares and to 291000 hectares in 2017. In 2018, the cotton planting area further decreased to 268000 hectares, and then rose to 335000 hectares in 2019.

Although the attacks of white flies and pink cotton bollworm reduced the cotton planting area, farmers also complained about the fake seeds on the market. They said that the Cotton Corporation of India (CCI) purchased a small amount of cotton from farmers, and they had to sell their crops at prices lower than the minimum selling price (MSP) most of the time.

The minimum price of medium staple cotton is 6620 rupees per tonne, and the minimum price of long staple cotton is 7020 rupees per tonne. Farmers in this area said that Indian cotton companies only bought limited stocks at the lowest price, and the remaining stocks were purchased by private buyers.

Sukhjinder Singh Rajan, chairman of the Rajewal League of the Indian People's Party from Abohar, said: "As the traders formed a monopoly, farmers had to sell cotton at a low price of 4000 rupees per public load. The amount of cotton purchased by private enterprises was very small."

Rajan added: "I am fed up with it, and I changed to rice. Last year I planted cotton on 6 acres of land, and this year I will change to rice."

Darshan Singh of Giddranwali village said: "Last year I planted 15 acres of cotton, this year only 3 acres."