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26th Feb 07, Devinder Sharma ~ STWR

So for 40 years, nearly 17 million cotton growers have actually been subsidising the textile industry. I had thought this was a classic case of public-private partnership. The textile industry would remain eternally grateful to toiling cotton farmers. They would always ensure that cotton farmers were a happy lot. But I was completely wrong. None of the textile majors have even made a cursory move or effort to share even a fraction of their booty with the struggling cotton farmers. At least, the textile majors could have launched a massive rescue operation for the 12 lakh cotton farmers in nearby Vidharba region in Maharashtra. But who cares?

Unashamed of its past performance, the textile industry is now proposing a public-private partnership that draws a tripartite MoU between a select group of farmers, Cotton Corporation of India (CCI) and the textile mills. The idea is to provide farmer with inputs, conduct demonstrations and the mills agree to buy the produce at a premium of 5-10 per cent of prevailing market price. 

The bottom line is clear. Textile industry is only looking for cheaper raw material. The mils want to take advantage of the penury and hardship that cotton farmers are faced with. But the moment an opportunity will arise to payback its gratitude to crisis-ridden farming community, the industry will flee seeking greener pastures elsewhere.

Since 1993, nearly 75 per cent of the 1,50,000 farmers who have committed suicide unable to face the humiliation that comes along with growing indebtedness, were cotton growers. These farmers died because they were unable to bear the brunt of rising cost of cultivation and the static output prices. They didn’t even know that they were victims of an economic policy that was aimed at benefiting the textile industry. They are the unsung heroes of India’s textile revolution, which claims to be the second biggest employer in the country.

If only these farmers had got the right price for the cotton they produced, the number of suicides would have been far less. In fact, cotton prices have been on a steady decline thereby acerbating the prevailing farm crisis. The industry is clamouring for still lower prices.

Unmindful of the serial death dance being enacted in the cotton belt, the textile industry instead forced the government to allow cheaper imports. During the period 1990- 2005, the import of cotton lint increased at a compound growth rate of over 75 per cent. This was despite the customs duty being increased from zero to 5 per cent in the year 2000. The industry was therefore visibly happy at the availability of low-cost cotton, even if it meant biking cotton farmers.

Cheaper imports are coming because of the massive subsidies cotton farmers get in the United States and European Union. With the US providing nearly US $ 4.7 billion dollar in subsidy support to its 20,000 cotton growers (one Arkansas cotton grower received US$6 million, equal to the combined annual earnings of 25,000 cotton farmers in Vidharba), cotton farmers in India are priced out. At such crucial times, it should have the responsibility of the textile industry to seek adequate protection for farmers, its partners in value chain. 

Regardless of any such social responsibility, the industry continues to grow. With a turnover of Rs 1,50,000-crore, including export earnings, the textile industry is now poised to take advantage of the phase out of the multi-fibre agreement under WTO. It grew not only at the cost of farmers’ sweat and blood, but also the state exchequer. Just to give you an example, the Cabinet Committee on Economic Affairs, under the chairmanship of Prime Minister Manmohan Singh, recently cleared four more textile parks bringing the total to 30.

Some say that it was only before 1991 that infrastructure was the headache of the State. But the clearance for the textile parks came only on Jan 18, 2007. Development of textile parks is aimed at facilitating additional investment, generate employment and increase textile production. To make this possible, it is the textile ministry that is expected to provide infrastructure facilities, such as roads, electricity supply – including captive power plants – and telecom lines to firms willing to set up textile units. The private share in ‘development’ is missing.

Despite all the talk of creating models of public-private partnership based on transparency and commitment, the cotton debacle provides an important lesson in economic exploitation. Cotton farmers were very conveniently duped for four decades. They still are being fleeced by crony capitalism. What could have turned public-private partnership between the textile industry and the cotton growers into a replicable global model has in reality turned out to be a national model of shame. It demonstrate clearly the insensitivity the industry has towards its lesser and deprived partners in growth. 

Social inclusiveness does not only mean setting up village schools and hospitals to demonstrate corporate responsibility. The private sector cannot get away by setting up a few schools or hospitals for the poor. Public-private partnership can only turn into a ‘win-win’ situation when both partners measure up at the time of need. Textile industry could have easily demonstrated its honest intentions by coming to the rescue of the farmers committing suicides. After all, it is these cotton farmers who continue to subsidise the textile industry.

Devinder Sharma is an award-winning food and agriculture policy analyst and a regular contributor to STWR. His writings focus on the links between biotechnology, intellectual property rights, food trade and poverty.

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