Seed Cotton bonus payments for Indian Gujarat growers

On October 23, 2017, the State of Gujarat announced a bonus of about 3.5 US Cents per pound (INR 500 per 100 kg) be paid to farmers for seed cotton. The payment is for farmers that sell their seed cotton to state procurement agencies and is in addition to the minimum support price (MSP) announced by the Government of India.

General Information:

Effective November 1, 2017, the State of Gujarat will provide an additional INR 500 per 100 kg to farmers as extra compensation for seed cotton. The bonus amount of INR 500 per 100 kg roughly equates to 3.5 cents per pound above the MSP announced by the Government of India. The bonus amount is the same for all cotton varieties grown in the state.

The MSP announced for the most popular cotton variety, Shankar 6, is INR 4270 per 100 kg. With the bonus, farmers in Gujarat will receive INR 4770 per 100 kg or 33.3 US Cents per pound for their seed cotton. According to the first advance estimates published by the state government, the area planted under cotton is nearly 2.7 million hectares, with an estimated production of 7.4 million 170 kg bales (5.7 million 480 lb. bales / 1.25 million metric tonnes).

Disclaimer: This summary is based on a cursory review of the subject announcement and therefore should not be viewed under any circumstance, as a definitive reading of the regulation in question, or of its implications for U.S. agricultural export trade interests.

Details of Notification:

  • Type of Regulation: Announcement
  • Public Notice Date: October 23, 2017
  • Proposed Date of Adoption: Effective November 1, 2017

Products Affected: Cotton

Agency in Charge: State Government of Gujarat, Department of Commerce, Ministry of Commerce & Industry, and Ministry of Textiles, Government of India