The government is yet to decide about the cotton intervention price for the current season, which is likely to deprive the growers of due benefits, official sources told Business Recorder. The sub-committee of National Assembly Standing Committee on Textile Industry had recommended fixing the minimum guaranteed price of cotton at Rs 2700 per 40 kg for the financial year 2015-16 after considering the cost of production.
However, the National Assembly Standing Committee on Textile Industry and the Ministry for National Food Security and Research, after having detailed discussion unanimously agreed to fix the intervention price of cotton at Rs 3000 per 40 kg for the financial year 2015-16. It was further decided to take the provincial governments of Sindh and Punjab onboard for implementation mechanism. However, sources said that meetings are yet to be arranged with chief ministers of both the provinces.
Without the input by the provincial governments, the matter may further linger on which would have a negative impact on the growers, the sources said, adding that Punjab government held internal meeting where DG Agriculture had briefed Chief Minister on the cotton intervention price issue.
The ministry of textile industry has also wrote a letter to the chairman National Assembly Standing Committee asking for a reminder to the provincial governments as one-month has passed since the committee took the decision. Initially, the ECC approved Rs 000 per maund of seed cotton (Phutti) and corresponding price for lint cotton was fixed at Rs 6,864 per maund for procurement of cotton from ginners.
Following the ECC decision, the TCP in second week of November, intervened in the domestic market and started procurement of the commodity to stabilise cotton prices. However, the late decision proved to be not much beneficial for the farmers and objections were raised after which cotton procurement was suspended after procurement of less than 100,000 bales. Sources further said that Trading Corporation of Pakistan (TCP) is likely to be made bound to procure at least two million cotton bales for this year.
As per Indian model of cotton procurement, the government may also procure seed cotton instead of lint cotton on experimental basis, officials sources revealed. They said the cotton price may be fixed in between the import and export parity prices. The lint cotton is exported as well as imported by Pakistan and during this course of business activity a lot of revenue is being spent, which may be avoided through the import of only long staple cotton which is required for fine quality cotton in certain textile sectors. Pakistan is not giving any subsidy on cotton so the cotton growers have to compete with the prices of subsidised cotton.
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