Farmers in India shift to soybean, despite support price hike in cotton

In spite of the hike in the minimum support price (MSP) of cotton for the kharif 2018 season by 2.5 times that of soybean, farmers in key states of India appear to be shifting towards oilseed cultivation, finding it potentially more remunerative.

On an all-India basis, the area under cotton was 4 per cent lower at 109.8 lakh hectares as on August 3 compared with what it was at the same time last year. Soybean acreage, on the other hand, was about 11 per cent higher than last year at 109.5 lakh hectares.

With 36.5 million bales (of 170kg each) of cotton production estimated for 2017-18 crop year (July-June), the export of the fibre crop may increase to 7 million bales in the current marketing year (October-September) from 5.8 million bales in the previous year, Cotton Association of India said last month.

However, any fall in cotton production in 2018-19 crop year (July-June), may lower exports from India next year even as traders were expecting to cash in on the US-China trade war after China levied additional a 25 per cent import duty on US cotton.

Since soybean and cotton are competing crops in the kharif season, farmers will obviously prefer the one which will give them higher returns. Additionally, the persistent pink bollworm infestation problem in cotton crops have got cotton farmers worried and tentative about its economic viability.

The data compiled by the Union Ministry of Agriculture showed a sharp decline in sowing area under all primary kharif crops, including pulses, cotton, and oilseeds due to erratic rainfall this monsoon season.

Despite a normal long period average (LPA) forecast, the monsoon rainfall took a break of nearly 10 days after initial showers early this season. Feared with crop damage, the government of Maharashtra advised farmers in the state to wait for actual rainfall before commencement of sowing this kharif season.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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