Effectiveness of agricultural price policy in Punjab with special reference to cotton

The present study was undertaken to analyse the effectiveness of agricultural price policy particularly for cotton in Punjab. The results of study showed that market price of cotton was higher than the MSP for all the years under study in Punjab. Thus, the MSP or price policy in case of cotton is indicative only as the producers have not to wait for government agencies for procurement and they can sell their produce at higher prices in the open market. For most of the years, even the farm harvest price was higher than the average wholesale price due to higher demand of cotton which forced the buyers to purchase more at the harvest time at prices which were higher than the whole sale prices during off-season when small quantities only are brought for sale. For cotton, demand mainly comes from private mills and traders but depending upon import, export and international price scenario, in some years significant quantities were purchased by state owned Cotton Corporation of India also. The effective price policy for paddy and wheat in the state has induced significant increase in the area under these crops and the farmers are now reluctant to divert from paddy-wheat cropping system. The study emphasized that farmers of the state should improve the quality of the produce which may help to boost the exports of cotton.