Allegations of Organic Cotton Scam

The Congress party in India has made grave allegations regarding a scam involving over ₹2.1 lakh crore associated with organic cotton production. This claim, made on July 26, 2025, has led the party to call for the establishment of a Special Investigation Team (SIT) headed by the Central Bureau of Investigation (CBI) under the oversight of a High Court judge.

Key aspects of the allegations include:

• Nature of the Scam: Senior Congress leader Digvijaya Singh has accused certain traders of mislabeling non-organic cotton as organic, which has resulted in exorbitant profits for these traders while genuine farmers languish without even the minimum support price. He noted that this scam also involves extensive tax and Goods and Services Tax (GST) evasion.

• Historical Context: Singh referenced the National Programme for Organic Production (NPOP), initiated in 2001 by the Ministry of Commerce and Industry. This program is managed by the Agricultural and Processed Food Products Export Development Authority (APEDA) and aims to certify and regulate organic exports. The NPOP accredits certification bodies which verify Internal Control Systems (ICS)—clusters of 25 to 500 farmers cultivating organic cotton.

• Implementation Statistics: Currently, there are around 6,046 ICS groups and 35 certification agencies in operation. These farmer groups receive government support of ₹5,000 per hectare for three years to cultivate organic cotton.

• Fraudulent Practices: It was alleged that many farmers listed under these ICS groups are either not cultivating organic cotton or are unknowing participants in the system. Claims were made that fake groups have been established in Madhya Pradesh, misleadingly including farmers’ names to obtain transaction certificates necessary for declaring products organic.

• Market Impact: Singh indicated this malpractice has tarnished India's credibility in the global organic market, with significant repercussions for Indian farmers. Institutions such as the U.S. Department of Agriculture, the European Union, and the Global Organic Textile Standard have reportedly revoked the accreditation of certain Indian certifiers, which has led to a perception of India as a fraud hub in the organic produce sector.

• Lack of Government Action: Singh revealed that despite alerting the Prime Minister on the issue of organic cotton fraud in Madhya Pradesh as early as August 2024, and receiving acknowledgment from Commerce Minister Piyush Goyal regarding the irregularities, no decisive action has been taken to address these issues.

• Demands from Congress: The Congress party has called for:

  • Criminal proceedings against the 192 fraudulent ICS groups involved.
  • Comprehensive investigations into these ICS groups.
  • Fair compensation for the farmers who have been exploited in this scam.

Important Points:

• Allegation of scam concerning organic cotton exceeding ₹2.1 lakh crore.
• Demand for SIT investigation led by CBI under High Court judge supervision.
• Accusation of traders falsely labeling non-organic cotton as organic.
• Reference to NPOP and APEDA’s role in organic product certification since 2001.
• Current count of 6,046 ICS groups in India nurturing organic cotton farming.
• Concerns regarding false ICS registrations and the exploitation of farmers.
• Disreputable impact on India's global credibility in organic products market.
• Prior communications to the Prime Minister and acknowledgment without action.
• Calls for legal action against fraudulent practices and compensation for farmers.

This development highlights the ongoing challenges in India's organic farming sector and the significant implications for farmers and international market perceptions.