The Southern India Mills’ Association (SIMA) has thanked the government for introducing Direct Payment Deficiency System (DPDS) to help cotton farmers get better realization for their produce when the market rates rule below the MSP.

The Confederation of Indian Textile Industry (CITI) and SIMA had been insisting that the government introduce Direct Benefit Transfer System in lieu of MSP operations and pay the price difference between MSP and market price directly to the farmers whenever market prices rule below the MSP.

In a press release, SIMA chairman M.Senthilkumar said that the operation of DPDS through Agricultural Produce Market Committee (APMC) would greatly benefit the farmers and the industry. He said that during the earlier season, the industry had to pay Rs.2000 to Rs.3000 higher than the regular price for the cotton when compared to the international price and particularly mills in Telangana and Andhra Pradesh (cotton producing States) had to source cotton from other states as CCI suspended sale during the cotton season between March and May 2015.

Senthilkumar has said that China Cotton Reserve Corporation incurred huge losses due to MSP operations and therefore, has introduced Direct Benefit Transfer System from the last cotton season. He said that DBT system has enabled Chinese spinning sector to source cotton at market prices. He hoped for a similar scenario in India that would create a win-win strategy for the farmers and the industry, apart from reducing losses to the government.