Tamil Nadu cotton farmers seek subsidy after duty cut

Farm groups say the market is already weak. While the government’s minimum support price for cotton is set at Rs 7,710 a quintal, farmers say they are getting only about Rs 6,500 in the open market. In Tamil Nadu, they argue, the impact is worse because state-backed procurement is missing, leaving growers more exposed to price swings.

The Tamil Nadu Farmers Protection Association said the state’s refusal to bear transport costs for procurement has effectively halted buying by the Cotton Corporation of India in the state. That has left farmers with fewer outlets just as the duty cut opens the door to cheaper overseas supply, raising the risk of a broader price correction.

For investors, the stakes extend beyond farm incomes. A prolonged duty waiver would likely benefit textile companies that rely on cotton as a raw material, while squeezing upstream growers and potentially increasing pressure on governments to extend compensation or support schemes. The policy also comes as India faces external trade pressure from the U.S., making relief for manufacturers politically more likely even if it adds stress to agriculture.

The next focus is whether New Delhi extends the duty suspension beyond Sept. 30 and whether state governments, including Tamil Nadu, step in with procurement support or cash relief to blunt the hit to farmers.