Modi criticises cotton export ban, writes to PM

New Delhi: Expressing "shock" over the ban on cotton exports, Gujarat Chief Minister Narendra Modi on Monday wrote a letter to Prime Minister Manmohan Singh saying that the move will benefit the textile industry at the expense of farmers in the state.

"I was shocked to learn the immediate ban imposed by the Government of India on cotton export today," Modi said in the letter to the Prime Minister.

The Chief Minister demanded that either the ban should be completely lifted or the 'Shankar' variety (grown in Gujarat) should be kept out of the restriction.

The Directorate General of Foreign Trade (DGFT) on monday issued a notification banning exports of all grades of cotton with immediate effect.

Gujarat along with Maharashtra and Andhra Pradesh are the major cotton producing states in the country. Drawing the attention of the Prime Minister towards the "disastrous consequences" of the ban on cotton exports last year, Modi pointed out that "last year alone, Gujarat farmers incurred a loss of Rs 14,000 crore due to export ban on cotton."

Explaining the loss, the Chief Minister said that China released its stocks of cotton in the global market following the ban on the natural fibre by India and profitted from it, which actually should have gone to the Indian farmers.

Modi pointed out that the textile industry is being favoured at the expense of the cotton farmers in Gujarat.

He said that textile mills and yarn manufacturers have a current stock of 27 lakh bales (of 170 kg each) against a minimum of 52 lakh bales as they have not been purchasing the natural fibre.

"Now they want to buy cotton at prices lower than the Minimum Support Price (MSP) through the export ban by central government, which will artificially bring down the cotton prices and create panic among farmers," Modi pointed out.

This strategy by the industry is open for speculative manipulation in the market, the Chief Minister added. "Giving benefit to the textile industry should not be at the cost of Gujarat farmers who have contracted substantial quantity of quality cotton for export," Modi complained.