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Cotton farmers investing --- The Economic Times

Cotton farmers investing in property...

Progressive farmer Vikas Rai of village Nihal Khera in Ferozepur district, who cultivated Bt-I and Bt-II on his 100-acre farm, feels that investing back into the field was the best thing to do. "Major investment of Rs21 lakh this year will go on importing machinery from Lemken, Germany, which will include reversible plow, cultivators, sub soiler, disc rotator, harrow, etc. Also, I will be setting up a 70 feet by 200 feet workshop shed for my farm equipment," he said.

CHANDIGARH/BANGALORE/PUNE: Cotton, which has turned into white gold for Indian farmers, is fuelling a property boom in Punjab, Gujarat and Maharashtra this year as growers invest their returns in land. Smaller farmers are heading to automobile and FMCG showrooms to celebrate a season of record prices.
"The net profit is expected to be Rs25, 000 per acre, which is a 40% increase over the previous year. As a safe investment, we will look at buying property in Chandigarh. New machinery, from direct seeders for paddy to happy seeder for wheat sowing and roto seed drill, is the other key investment that we will make to increase our reach in providing farm services to peasants," said 71-year-old Surinder Ahuja, a progressive farmer who has been planting Bt cotton on 50 acres in Hisar (Haryana) and 10 acres in Fazilka (Punjab) for the past four years.

He added that though the yield has not been good (15-20% loss in yield this year) compared to the previous year and input costs have increased, the savings were good due to a hike in the price of cotton."I have spent Rs8,000 per acre on input costs, including labour, fertilisers, insecticides, seeds, etc, compared to Rs5,000 per acre in the previous year, owing to rains and pest attack," Mr Ahuja said.
However, the unpredictable weather has done little to dent the hopes and sense of optimism among cotton growers across the country.
"I earned around Rs4.5 lakh in 2009 growing Bt cotton on nearly 20 acres. Part of the money was used to clear outstanding loans, including one taken for constructing a house. Buoyed by last year’s experience I have increased the acreage to nearly 30 acres though late rains may lower the yield this year," said EB Bhanuvalli, a cotton grower based in Ranebennur, Karnataka, who was earlier growing the Jayadhar variety.


Cotton farmers investing in gold, farm machinery
Mr Bhanuvalli, who had used last year’s earnings to partly repay the home loan, is hopeful of moving into the new house with better returns this year.
Similarly, in Gujarat, where cotton is grown over 26 lakh hectares, farmers are investing in real estate projects across the state. The price of Shankar-6 variety on Thursday in the state was Rs46,500-47,000 per candy. "Farmers from one or two villages are coming together and purchasing entire buildings and plots to maintain the community feeling. Others are investing in educating their children in city schools," said Bharat Wala, president of Saurashtra Ginners Association .

In the irrigated north Maharashtra’s cotton belt districts of Jalgaon and Dhule, daily arrivals at each Agricultural Produce Market Committee was 8,000-10,000 quintals. With farmers not willing to sell

land, buyers were investing either in gold or farm machinery. Pravin Dhangar, a cotton farmer from Dharangaon in Jalgaon district, produced 100 quintal cotton which he sold at Rs4,350 per quintal. The marginal farmer , who has a two-wheeler, now plans to buy a tractor. "Buying new land is not possible as prices are very high and farmers are not ready to sell their land even for high prices. Also, with gold prices ruling at an all-time I am not keen to invest in the commodity," he said.

Automobile to tractor manufacturers are expecting good business this year across India’s cotton belts. So it isn’t surprising that farmers are being told to wait for 1-3 months for the delivery of their vehicles. “We have experienced a sudden rise in demand for our tractors and hence the waiting period has gone up to one month,” said Jeevan Patil, sales manager, Chaudhari Automobiles, dealers of John Deere tractors in Bhusaval in Jalgaon district.