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Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,761
824hr
Pakistan Cases
1,286,453
43124hr
0.98% positivity
Sindh
476,494
Punjab
443,379
Balochistan
33,491
Islamabad
107,848
KPK
180,254

Cotton, once acknowledged as the lifeline of Pakistan’s farmers and a source of raw material to more than 400 textile companies, hit an all-time low last year in production and is bordering on disaster. Over the last 10 years, cotton production has declined by more than 62 percent from 14.81 million bales to 5.65 million bales (2020/21 season) and as a result Pakistan’s textile sector and economy have suffered considerable losses. This decline in production has forced the entire value chain to rely on imported cotton which is highly unsustainable for the industry. Meeting this shortfall has cost 5.76 billion dollars (from FY16 to FY20) in importing 19.5 million bales to meet the demands of the domestic textile industry. In FY21, $1.5 billion cotton imports were required, thereby putting additional unnecessary stress on the Balance of Payments (BoP).

Fortunately, this year the international prices for cotton have increased from a low of 60 cents to over $1 per pound at present. The crop this season is also estimated to reach over 9 million bales, whereas last year’s production was under 6 million bales. The amount disbursed as crop value to cotton farmers last year was Rs 200 billion, while this year, as a consequence of higher prices and higher expected crop size, the amount will exceed Rs 600 billion. The rural economy, particularly the poorer segments will be beneficiaries of this welcome development. The additional Rs 400 billion to cotton areas augurs well for Pakistan, as it will foster an economic boom in these relatively backward areas and revitalize the future of cotton cropping.

APTMA (All Pakistan Textile Mills Association) is taking steps to improve the cotton sector’s performance through the APTMA Cotton Foundation (ACF). ACF has taken initiative to create cotton clusters and centers of excellence, and promote model farming techniques. The foundation, as part of a comprehensive strategy, will also develop a bank for mechanized tools to be made available to members of each cluster, on a cost-sharing basis, thereby improving the quality and yield of cotton. The foundation is also geared towards providing a platform for collective procurement of quality inputs at lower costs, creating economies of scale. There will be means of further assisting farmers to obtain financial aid. Technological support through digital mapping and drones will provide a targeted approach to fertilizer and pesticide use and take cotton farming into a new, technologically driven era.

There is a pressing need to facilitate research on development of cotton seed, as the current cotton seed available is low yield and with poor characteristics. It is vital to develop high yielding varieties with superior lint characteristics using germplasm with a wide genetic base. The existing germplasm becomes susceptible to many insects/pests and has failed to perform under weather variation. Due to low cotton yield per acre and low international prices, farmers have preferred more profitable crops such as sugarcane, rice, and corn. These alternative crops provided better returns to farmers and are also more resistant to insect attack and diseases than cotton. For crops such as maize and rice, the seed varieties developed by the private sector have high yield potential, which is why over the last decade, cultivated area under Basmati and Maize has doubled and yield has increased significantly. To keep up, the development of research centers of excellence that are geared towards cotton enhancement can help to educate farmers on how cotton can be a more viable option for them. The Cotton Foundation is dedicated to establishing knowledge centers and research labs, particularly biotech labs, while collaborating with international research institutions. The labs will collect data from all over Pakistan to maintain a database, allowing us to devise data-driven solutions to cotton issues. Research centers will educate farmers for post-harvest. Moreover, education and training campaigns will be run throughout the year to keep the farmers up-to-date on every aspect of cotton cultivation.

The growth of value-added exports in FY21 (37% growth in knitwear, 32% in towel, 29% in bed wear, 19% in garments) is evidenced by enhanced cotton yarn supply to the domestic market. Yet, prioritization of the sugar industry has led to the replacement of cotton as Pakistan’s dominant crop, costing Pakistan an additional 10 billion dollars in the last 5 years. The area ‘encroached’ upon by sugar would be far more fruitful with cotton cultivation, adding an additional 0.25 percent to Pakistan’s GDP along with a minimum 1.27 percent of additional wheat contribution to GDP, if a mere half of the sugarcane production area reverts to cotton.

To allow a fair competition among crops, the government must refrain from interfering in the free market. Large subsidies, price support, and high tariffs on sugar imports must be done away with. If the government takes any measures that result in an artificial reduction of yarn prices, imports of cotton will be discouraged and lead to a real shortage of cotton and yarn. It is crucial to raise awareness on the importance of cotton initiatives for the revival of cotton in the country. Modern and mechanized cotton farming, the establishment of fiber testing laboratories, as well as seed testing and biotechnology labs of international standards will determine the future productivity of the textile sector, and resultantly the economic growth of Pakistan. APTMA Cotton Foundation (ACF) presents a model farming concept that aims to revitalize cotton cultivation.

Copyright Business Recorder, 2021

Author Image

Shahid Sattar

PUBLIC SECTOR EXPERIENCE: He has served as Member Energy of the Planning Commission of Pakistan & has also been an advisor at: Ministry of Finance Ministry of Petroleum Ministry of Water & Power

PRIVATE SECTOR EXPERIENCE: He has held senior management positions with various energy sector entities and has worked with the World Bank, USAID and DFID since 1988. Mr. Shahid Sattar joined All Pakistan Textile Mills Association in 2017 and holds the office of Executive Director and Secretary General of APTMA.

He has many international publications and has been regularly writing articles in Pakistani newspapers on the industry and economic issues which can be viewed in Articles & Blogs Section of this website.

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