PPP Special 08 - Institut für Entwicklungs- und Agrarökonomik

1 Introduction
1.1 Background
Cotton is one of the most important commercial crops in India
contributing to over 30 per cent of foreign exchange earnings of the
country. India accounts for approximately 21 per cent of the world cotton
area but the average productivity of cotton is markedly low at about 293
kg lint cotton/ha compared to 600 kg/ha world average per year
(Sen, 2003). The low productivity of cotton is caused by some serious
constraints. Lack of irrigation, limited supplies of quality seeds, poor
management practices, high costs of cultivation (particularly of plant
protection measures) and serious pest outbreaks have been the major
limiting factors in the past (Mohanty et al., 2002). Figure 1 illustrates the
big gap between size of cotton area and productivity of cotton in India
when compared to other cotton producing countries like Turkey or
China.
Figure 1.1: International comparison of yield and area under
cotton
Yield [kg/ha]
1200
1000
800
600
400
200
0
Yield
Area
China USA India Pakistan Egypt Turkey
10
9
8
7
6
5
4
3
2
1
0
Area [m ha]
Source: adopted from Choudhary, 2001
In 2002, the government of India approved the commercial use of Bt
cotton despite concerns and discussions regarding possible