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India coming on strong in cotton production

Cotton producers in India have made huge strides forward in cotton production, increasing their average yields from 294 pounds per acre nationally to 391 pounds per acre over the last three seasons, a 33 percent increase. As a result, Indian cotton production rose from 10.6 million bales in 2002-03 to 19 million bales in 2004-05. The huge 2004 crop produced 4 million bales of excess supply.

This upsurge in production was due to a combination of great weather and of Bt technology's ability to reduce risks and costs and save Indian cotton producers from the worm invasions that used to frequently destroy their crops.

The great weather was shared across almost the entire planet in 2004 and the yields produced will likely go down in history as a once in a lifetime happening.

Technology's impact on cotton production in India and around the world is still evolving. The International Cotton Advisory Committee estimates that 27 percent of world cotton area was or will be planted to officially approved biotech varieties in 2005-06, up from 2 percent in 1996-97. That 27 percent contributes to 36 percent of world production and exports.

Meanwhile, world average yield has climbed from 534 pounds per acre in the 1990s — before Bt technology — to a surprising 652 pounds per acre in 2004-05.

For individual growers, higher yields can have the effect of lowering break-even costs, which makes these farmers competitive at lower prices.

It's sort of a double-edge sword.

According to the ICAC, the world's most efficient cotton producers are producing cotton at below 55 cents per pound in several countries.

The consequence of increasing efficiency in world production could be a run of lower prices over the next decade compared with the 70-cent average of the last 30 years, according to Gerald Estur, ICAC statistician, speaking at the ICAC's 64th Plenary meeting in Liverpool, Sept. 27.

India is a country to keep an eye on, as it could start to export more cotton as their yields increase. In 2002, India's Genetic Engineering Approval Committee approved the commercial release of three hybrid Bt cottons. Indian farmers took to the new technology quickly because of increased financial returns. According to a report from the ICAC, the illegal use of Bt cotton seed is decreasing, and the percentage of Bt cotton acres is rising.

Indian farmers have found that Bt cotton has provided consistent yield and fiber quality. While Bt cotton is only produced in hybrid varieties in India, there is a movement to place the technology in conventional varieties. Meanwhile India's imports of raw cotton have decreased from 1.95 million bales in 2001-02, to around 800,000 bales in 2004-05.

Currently, India is responsible for roughly one-fourth of the planted cotton area in the world with about 22 million acres planted to cotton. If their yields keep moving toward the world average, the country could become a big player in world trade very quickly.

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