The monopoly cotton procurement scheme was launch in Maharashtra in 1972 on the principle that gains would be distributed amongst the farmers and losses would be borne by the government.

So far, the scheme has incurred cumulative losses to the tune of Rs 1,300 crore. The scheme is run through the State cotton federation which is perpetually starved for funds. It works on loans made available from the State co-operative bank.

Jawandhia said, though the idea was that the government would bear the losses, successive governments have resorted to recovering them from the money paid to the farmers.

Between 1962 and 1990, says Jawandhia, the scheme incurred losses exceeding Rs 470 crore. Out of this, the government recovered about Rs360 crore from the bonus paid to the growers for their cotton, he claims.

He recalls that in 1978 the State Legislature had decided to reduce the quantum of price fluctuation fund deducted from the farmers' payments. Earlier, 25 per cent would be deducted to take care of price fluctuations and the Legislative Assembly decided to bring the deduction down to five per cent.

However, he adds, this decision was not implemented and the federation continued to deduct 25 per cent.

If the Congress is responsible for this injustice to cotton growers, the Sena-BJP alliance government too hasn't done much, he has lamented. During the last four years the rates paid to cotton growers have remained static. On the other hand losses have kept mounting. How does the government expect the cotton federation to repay the loans?

In 1994, the government once again considered the price fluctuation fund deductions and brought them down to 10 per cent. This resulted in additional payments worth Rs 50 crore to the farmers.However, he fears, if the markets for cotton outside improve the government might revert to deducting at the rate of 25 per cent since on paper the rules still haven't been changed.

Jawandhia has demanded that the alliance government should totally scrap the provision in the rules regarding deduction of the price fluctuation fund. He has also urged the alliance partners to make budgetary provisions to enable the cotton federation to meet some of its losses.