State to run monopoly scheme on co-operative basis

State to run monopoly scheme on co-operative basis
PRAFULLA MARPAKWAR

Mumbai, May 2: Despite mounting losses, the Congress-led Democratic Front Government will not wind up the Monopoly Cotton Procurement Scheme to protect the interest of the farmers, however, now it will be run on cooperative basis to make it more effective.

``We discussed at length the pros and cons of the scheme and have concluded that notwithstanding heavy losses, we should implement the scheme, but on cooperative basis. For the purpose, we will have to form cooperative socities of cotton growers at the lowest level and set up their apex body at the State level. The apex body will administer the scheme and ensure that the interest of the farmers is protected,'' Chief Minister Vilasrao Deshmukh said.

At the moment, the scheme is implemented by the Maharashtra Cotton Growers Federation headed by a nominee of the Government. Under the revised proposal, the scheme will be implemented by elected representatives of the cotton growers. ``We think, it will take a year or so to formulate rules for formation of cooperative societies and election of office bearers,'' Deshmukh said.

Earlier Deshmukh had a marathon meeting with Deputy Speaker Pramod Shende, Deputy CM Chhagan Bhujbal, Finance Minister Jayant Patil, Industries Minister Patangrao Kadam, Rural Development Minister R R Patil, Opposition leader Narayan Rane and BJP leaders Anna Dange and Eknath Khadse to discuss the fate of the monopoly scheme.

While Rane specifically asked the Government to run the scheme on a cooperative basis, Khadse suggested that in view of liberalisation, the monopoly nature of the scheme should be relaxed for the benefit of farmers. ``While a cooperative federation should implement the scheme, Government should ensure that farmers get remunerative prices. It should be the responsibility of the federation to raise funds from the open market or financial institutions for payment to cotton growers,'' Rane said. Khadse suggested the Government should amend the Monopoly Cotton Procurement Act to provide for sale of cotton in the neighbouring states. ``In view of liberisation in all sectors, we should permit the farmers to sale their cotton in the neighbouring states,'' Khadse added.

According to a senior official of the Cooperation Department, State's economy has been adversely affected owing to mounting losses suffered by the federation. ``In 1993-94, the losses stood at Rs 90 crore, while in the current year, the accumulated losses will cross the mark of Rs 2,200 crore. For obvious political reasons, the Government is bailing out the federation,'' the official said. During the Sena-BJP rule, it had obtained Rs 200 crore from Mumbai Metropolitan Region Development Authority, Rs 145 crore Thane District Bank, Rs 125 crore from Mumbai Bank, Rs 8 crore from Pune District Bank, Rs 25 crore each from Janata and Abhyudaya Cooperative Bank, Rs six crore from Maratha Mandir Cooperative Bank and Rs 15 crore from Mumbai Mercantile Cooperative Bank, the official said, adding, even for the current year too, the new Government has obtained a loan of Rs 3,246 crore to facilitate payment to farmers.

The official said, by and large, there is strong opposition to the continuation of the scheme in its existing form. ``We procured 131 lakh quintals in 1995-96, 150 in 96-97, 88 in 97-98, 124 in 98-99 and 175 in 99-2000. No doubt, for protecting the interest of farmers, we are implementing the scheme, but in view of drastic changes in the international markets, we are facing a piquant situation,'' he said.

The official said at a juncture when there is drastic fall in cotton prices all over the world, the Government was continuing with a monopoly cotton procurement scheme. ``Compared to prices in international markets, the prices under the State scheme were highest. Under such circumstances, there was no demand for cotton produced in the State,'' the official said.

Under such circumstances, there are four options before the Government: abolish the monopoly cotton procurement scheme, have CCI procure cotton at the support price declared by the Centre, have federation procure cotton without the clause of monopoly or implement the scheme as the provision of the law, which provides that the prices will be decided on basis of profit earned by the federation.

``We launched the monopoly scheme in 1971 to protect the interest of farmers, but with the passage of time, it has become outdated. However, for political reasons, we are implementing the scheme by incurring huge losses,'' the official said, adding, after considering the arguments advanced by the department, it was decided to implement the scheme on cooperative basis.