10-15 percent RD on cotton import, minimum support price: Special body to present resolution in NA today

The Special Committee on Agricultural Products will present a joint resolution in the National Assembly for passage on Thursday (today), recommending minimum support price for cotton crop and imposition of 10-15 percent regulatory duty (RD) on cotton import to protect local growers and reduce import bill, which is currently around one billion dollars annually.
The was decided in a meeting of Special Committee on Agricultural Products which was chaired by Asad Qaiser, Speaker National Assembly. The committee was given a briefing by Commerce Division and Ministry of National Food Security and Research (MNFSR) on exports/import of cotton as well as its stagnant production. The committee unanimously approved the TORs of the Special Committee on Agricultural Products which outline an ambitious undertaking to turn around Pakistan's agriculture sector.
Qaiser remarked that cotton is Pakistan's strategic crop and boosting productivity and export competitiveness is central to the revival of cotton in Pakistan. The committee was informed that cotton exports as well as imports have significantly declined in the last 9 months. It was highlighted that Pakistan's cotton continues to lose export competitiveness and cede space to the regional competitors.
The members remarked that the middle men extract maximum profitability on the basis of their lobbying and bargaining power while the farmers continue to be exploited.
The committee maintained that higher cost of production, price differential vis-à-vis international prices and lack of value addition have deprived Pakistan of competitive advantages in the international markets.
The members remarked that middlemen extract maximum revenue during the purchase. It was one of the reasons that area under cultivation for cotton has ceded considerable space to other crops. It was also highlighted that cotton price that farmers get, is also not in line with the international trend as they receive considerably lower prices than their counterparts in neighbouring countries. The members were informed that a short window for import, based on the limited needs of the local industry, resulted in massive imports and subsequent dumping.
The MNFSR also supported the imposition of RD on cotton import, saying it would protect and encourage local growers as the cotton sowing is about to start.
Joint Secretary Commerce Division Usman Qureshi said that Pakistan is a net importer of cotton as cotton of around one billion dollars was imported last year which contributed to trade imbalances. Furthermore, cotton exports declined by around 71 percent during the first nine months of the current fiscal year compared to the same period of last year.
Secretary MNFSR Hashim Popalzai said that India cotton production increased by 150 percent while Pakistan cotton production is stagnant, which is resulting in exports' decline. To meet local textile industry requirement, the country has to import cotton; however when regulatory duty is waived off, the industrialists import heavily and dump it which is resulting in low prices for local growers. Around 0.7 million bales of cotton are dumped in factories at present, he added.
Some parliamentarians said that All Pakistan Textile Mills Association (APTMA) has become a strong cartel and succeeds in manipulating government's policies in its favour at the cost of growers' loss.
MNA Riaz Fatyana recommended for 10-15 percent RD on cotton import to give level playing field and protect local growers. The recommendation was strongly endorsed by all the committee members.
Popalzai said that duty on cotton imports was waived off by the ECC despite their opposition, adding they support that duty be imposed on cotton imports.
Cotton Commissioner Dr Khalid Abdullah said that APTMA agreed last month on import parity prices but backed out two days ago from its commitment. Due to duty free cotton import, growers get on average Rs 34-40 billion less per annum. He further said that around 1.7 million of bales have been imported so far in the current year.
The speaker National Assembly said that it means the growers are being exploited. The MNFSR official said that even if duty is imposed on cotton import, it would not hurt industry as they could take it back in the shape of Duty and Tax Remission for Exporters (DTRE).
The committee was further informed that cotton import is not allowed through land route as per the law and can only be imported through sea, but cotton is being imported through land route in the country.
The committee decided to present a joint resolution in the National Assembly for passage on Thursday (today) while recommending for imposition of RD on cotton import as well as minimum support price.
Furthermore, all stakeholders would be invited in the next meeting to take their views. The committee also directed minister for NFSR to visit areas where crops were damaged by recent rains and storms and come up with estimated losses as the government has pledged to compensate the growers.
Qaiser further advised the Federal Minister Mehboob Sultan to personally visit the affected region and ascertain the estimated losses to the farmers. The minister assured that the government will extend maximum relief to the poor farmers. He added that the Prime Minister has also assured compensation to the farmers.
The minister expressed confidence, "Given the support and commitment of this committee, we may revitalise our agriculture and realise out true potential."
The committee was further informed that electricity prices was fixed at Rs 5.35 per unit for agriculture sector with no further taxes through the Parliament, but the government has added Rs 2 per unit fuel adjustment, which has increased the cost of production manifold.
The committee decided to summon concerned departments in the next meeting to resolve the issue.