Lint Based Trading of Seed Cotton

Description and Salient Features :

Seed cotton is conventionally traded irrespective of its ginning percentage (GP) which is a major price deciding component. Seed cotton is traded by presuming GP of around 34% and accordingly prevalent Minimum Support Prices (MSP) are offered to farmers. However, some cotton varieties realize as high as 42% GP. The benefit obtained out of higher GP goes to the pocket of traders and farmers are deprived of this benefit. CIRCOT is insisting policy makers to include GP as one of the parameter for cotton grading and deciding MSP for cotton. 

Hence, to promote GP based seed cotton trading, ICAR-CIRCOT launched a pilot project on lint based cotton trading to augment in doubling farmers’ income. It was a first of its kind innovative initiative in India. Under this pilot project, trading of seed cotton on the basis of lint realization or Ginning Percentage (GP) is promoted at APMC Market of Hinganghat (M.S.). At this facility, GP of cotton is determined on laboratory model ginning machines, developed and supplied by CIRCOT, before auction in APMC. This facility empower farmers to trade cotton based on GP and bargain with the ginners and traders accordingly. 

Stakeholders : Farmers, traders, ginners 

Benefit to Stakeholders : 

• Assurance of higher prices to farmers than the minimum support prices (MSP) for cottons with GP more than 34 %. 
• Empower farmers with premium of Rs. 200/- per quintal for 1% increase in GP over and above 34%.
• Every 1% increase in ginning outturn results in 3% increased overall benefit in ginners’ profit margin
• Facilitate objective cotton grading based on GP 
• Promote lint based trading of seed cotton 
• Motivation to breeders and scientists to develop high GP cotton cultivars 
• Contributes to doubling farmers’ income.

Benefit Cost Ratio : 

Lint based trading empowers farmers with premium of Rs. 200/- per quintal for 1% increase in GP over and above 34%. 

Status of Popularisation :

Popularised among stakeholders through awareness, demonstrations, trainings and extension programmes. A pilot project has been established to popularise trading of seed cotton on the basis of Ginning Percentage at APMC Market of Hinganghat (M.S.). This concept has been put forth in the various forums for its promotion and for considering GP as one of the parameter for deciding MSP.