- Approves tender for import of 100,000 tons of sugar
- Constitutes committee to help increase cotton production in the next fiscal year
- Also directs Petroleum Division, Finance Division, and PSO to provide a timeframe for payment of outstanding dues to PNSC
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved the tender for the import of 100,000 metric tons of sugar but constituted a committee on intervention price of cotton to increase its descending production in the next fiscal year to boost exports.
A meeting of the ECC presided over by Finance Minister Shaukat Tarin on Monday approved a summary by Industries and Production Division for approval of a tender opened on 25-06-2021 for import of 100,000 metric tons of sugar.
The meeting constituted a committee on intervention price for cotton crop of 2021-22 with the instruction to submit a report within 15 days. The ECC was informed that lower cotton production is hampering the industry's growth, textile exports, and elevating imports bill of edible oil as well as raw cotton, and livestock meal, besides causing economic insecurity in rural areas, etc.
The Agriculture Policy Institute (API) has calculated the cost of production as Rs4,406 for Punjab and Rs3,960 for Sindh. The stakeholders have recommended the intervention price of Rs4,500-5,000/40kg of seed cotton for the year 2021-22. A summary presented to the ECC reveals that the Ministry of NFS&R told the meeting that cotton, being the life-line of Pakistan's economy, achieved a production of 14.1 million bales in 2004-05.
However, for the last four years, the cotton production declined to 9.18 million bales in 2019-20 and 8.98 million bales in 2020-21 mainly due to area decline in Punjab and a thin profit margin in cotton as opposed to other crops such as sugarcane, maize and rice.
Pakistan can potentially produce 20 million bales in 3-5 years provided farmers are supported with appropriate technology and ensured a fair price. In the past, Pakistan procured cotton through the Trading Corporation of Pakistan (TCP) five times during 1998-2010.
A comparison of intervention period with that of non-intervention period reveals that cotton area end yield has increased during the TCP intervention period, and decreased during the period without intervention (2011-2020) The Food Ministry moved similar summaries (intervention price of cotton) twice in 2020; however, the ECC did not agree to the proposals.
Subsequently, the cabinet constituted a committee consisting of ministers for Foreign Affairs, Ministry of National Food Security and Research (NFS&R), the Economic Affairs Division (EAD), and the Advisor to the Prime Minister on Climate Change to deliberate upon the issues and re-submit the case.
On the summary moved by the Ministry of MNFS&R, the ECC directed the Minister for National Food Security on May 21, 2020 to hold a structural discussion with the provinces to evaluate various options of promoting cotton cultivation and extending support to cotton growers.
As a result of consultation, the Punjab Agriculture Committee headed by the governor Punjab recommended an incentive package of Rs5,000 as support price and a grant subsidy of Rs15,000 per acre for cotton growers to enhance cotton production. As the cotton sowing has already started, it is high time to encourage cotton growers by announcing intervention price to procure two million bales of cotton.
A Cotton Price Review Committee (CPRC) will monitor the cotton prices in local and international market at weekly intervals. Public intervention through TCP will come into effect on the recommendations of the CPRC, when market prices of seed cotton would drop 10 percent below Rs5,000/40kg and would continue till market recovers.
In order to promote cotton production in the country, bring stability in the domestic market and ensure fair return to the farmers, the Ministry of NFS&R proposes that: (a) total of two million bales may be procured by the TCP involving Pakistan Cotton Standard Institute (PCSI) for quality and standards checks; (b) Constitute a Cotton Price Review Committee (CPRC) to review market price and propose intervention at fortnightly bases; and (c) provide a cash credit limit (CCL) as required by the TCP to procure initially for one million bales of cotton at intervention price, in addition to incidental charges of about Rs8.15 billion, as financial and administrative cost, etc. The approval of the ECC of the Cabinet is solicited to the proposals made vide pars.
On a summary of the Maritime Affairs Division, the ECC directed the Petroleum Division, Finance Division, and PSO to provide a timeframe for payment of the outstanding dues to Pakistan National Shipping Corporation (PNSC).
On a summary about extension of general subsidy on five essential items being sold at the Utility Stores Corporation (USC), the ECC allowed extension in subsidies for 15 days from July 1 onwards and constituted a committee to work out future course of action within 15 days.
On a summary of the Power Division about payment of outstanding amount of net hydel profits, the ECC asked the Power and the Finance divisions to come up with a possible solution/option for raising required financing by the Wapda, within two weeks. The ECC approved Technical Supplementary Grants: (i) Rs10 million for the Aviation Division; (ii) Rs73.870 million in favour of the NSSP, Lahore; (iii) Rs20.70 million for Pakistan Academy for Rural Development, Peshawar; and (iv) Rs1 billion TSG for payment of disparity reduction allowance to concerned offices.
The ECC also approved TSG of Rs16.706 million for Inter-Provincial Coordination Division for payment to Federal Land Commission, as well as Rs1,012.176 million TSG for Interior Division for Frontier Corps Balochistan (South) and Rs1.6 billion for Department of Immigration and Passports, Ministry of Interior besides Rs456.641 million TSG for Federal Board of Revenue to pay off the pending liabilities of the project titled, "Development of Integrated Transit Trade Management System".
The ECC approved Technical Supplementary Grants of Rs2 billion for Foreign Affairs Division, Rs8 billion for Textile Wing of Commerce Division, Rs5,800 million for the utilisation of foreign aid of National Disaster and Risk Management Fund (NDRMF) projects, the Ministry of Planning, Development and Reforms.
Copyright Business Recorder, 2021