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Cotton concerns

THE `SAVE COTTON, Save Textiles' conference held last week in Coimbatore has once again brought into sharp focus the imperative of evolving medium- to long-term strategies for building global competitiveness into the country's enormous cotton sector. Giv en the position that in the cotton economy, the country has high stakes in the form of incomes, employment and export earnings, the unsatisfactory performance of indigenous raw material (in terms of production, yield, quality and exports) over the last t hree years has added to the creeping sense of despondency.

The WTO regime and further liberalisation of world markets from 2005 has compounded the uncertainties even while providing a formidable challenge to the innovative spirit of textile mills and garment manufacturers. It is obvious that the country is runni ng out of time if it is to pursue with any seriousness the need to stay competitive in the global marketplace. All stakeholders in the cotton community have to pull together with the focussed objective of moving towards attaining global competitiveness w hich may be defined as ``the ability to produce globally acceptable quality at globally comparable cost''.

Unfortunately, neither in raw material productivity, nor in processing economies or in marketing efforts is India today in a position to stand up to international competition. High cost of funds and other inputs as also low labour productivity further bl unt the competitive edge. No doubt, with the launch of Technology Mission on Cotton (TMC) -- whose objectives include augmenting incomes of farmers, reducing contamination and ensuring availability of quality cotton to the industry -- a major initiative has been taken to address the core issues; but given the enormity of the task, it is anybody's guess if the Mission by itself, without the active participation of market functionaries, would meet with any big success in quick time. Two core issues -- pro ductivity and quality -- deserve undivided attention. Following the garbage-in garbage-out principle, any attempt at reforming the cotton sector and modernising the processing units must start with ensuring production of raw material (cotton) of commerci ally acceptable quality and price. This calls for policy support of governments in principal cotton-growing States. A strong input delivery system -- with assurance of seed purity, pesticide quality, water supply, adequate credit -- and marketing infrast ructure can help transform cotton cultivation into a remunerative activity for growers. This, of course, is no mean task. State-level pressure groups comprising farmers, traders, processors and mills will have to lobby the Government for active participa tion in strengthening the cotton economy.

On the processing front, large idle capacity and fragmentation of units are leading to scale diseconomies. A process of consolidation should be set in motion. In one of its mini-missions, the TMC encourages modernisation of ginning and pressing factories , something the units must take advantage of. Importantly, however, there is strong belief that as end-users the textile mills have to play a more proactive role in addressing cotton production-related issues. Establishing backward linkage will surely be nefit the industry by helping it access quality raw material and add to its competitive strength. Cotton has been specifically identified by the National Agricultural Policy as a fit candidate for private sector participation through contract farming and land lease arrangement to allow accelerated technology transfer, capital inflow and assured markets. Such backward integration will also help reduce, if not eliminate, trade disputes over quality and payment that currently vitiate the cotton business. C learly, we have got to save cotton in order to save our textiles.