The Union Cabinet has cleared ₹1,718.56 crore as reimbursement to the Cotton Corporation of India (CCI) for price support extended under minimum support price (MSP) operations during the 2023-24 cotton season.
The decision was taken by the Cabinet Committee on Economic Affairs chaired by Prime Minister Narendra Modi.
The reimbursement relates to procurement carried out between October 1, 2023, and September 30, 2024, when market prices remained below MSP levels.
During the season, CCI procured 32.84 lakh bales of cotton under MSP operations. The intervention covered around 7.25 lakh farmers across producing regions.
Payments amounting to ₹11,712 crore were credited directly to farmers’ bank accounts. The procurement was undertaken to prevent distress sales as open market prices weakened.
CCI, as the central nodal agency, purchases fair average quality cotton without any quantitative cap when prices fall below MSP.
India’s cotton production for the 2023–24 season was estimated at 325.22 lakh bales. The crop was cultivated across 114.47 lakh hectares.
The country accounts for nearly 25% of global cotton output. Price support operations are typically triggered in years when arrivals coincide with softer market demand.
CCI operated more than 508 procurement centres across 152 districts in 11 major cotton-growing states during the season. The network is intended to provide access points for farmers to sell produce at MSP.
The MSP for seed cotton (kapas) is fixed annually based on recommendations from the Commission for Agricultural Costs and Prices (CACP).
Cotton remains a key agricultural commodity, with an estimated 60 lakh farmers dependent on the crop. The value chain, including processing and textiles, supports an additional 400-500 lakh people.
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The approval formalises reimbursement for MSP operations undertaken during a period of lower cotton prices, with procurement used to stabilise returns for farmers.
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Published on: Mar 19, 2026, 10:28 AM IST
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