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Editorials

Cotton 'SOS'

It may not be any exaggeration to say that the economy of Pakistan revolves around cotton and its products to a great extent. Unfortunately, however, the farming community of the country has been unable to enhance per acre yields and the quality of cotton

Updated 04 Nov 2019

It may not be any exaggeration to say that the economy of Pakistan revolves around cotton and its products to a great extent. Unfortunately, however, the farming community of the country has been unable to enhance per acre yields and the quality of cotton crop significantly over the years while cotton manufacturers have not been able to produce quality products in order to have comparative advantage in the international market. The Karachi Cotton Association (KCA) was so much perturbed over the low production of 10.20 million bales of cotton in the current cotton season compared to the target of 15 million bales that it has called upon the government to declare an emergency for arresting rapidly falling cotton production and launch an action plan for bringing in more area under cotton crop. According to the KCA, decline in cotton production is due to reduction in yield per acre, cultivation of sugarcane in the areas earmarked for cotton cultivation and supply of uncertified cotton seeds and pesticides. There was a gap of about 5 million bales in cotton production and local mills' consumption which was filled through imports. After payment of heavy duties and taxes on the import of cotton, the cost of final products is considerably increased due to which the local textile industry becomes unable to compete in the international market.
In order to increase cotton production and improve its quality in the coming years, the KCA has come up with a set of proposals.
It may be noted that this is not the first time that the KCA or any other body has shown its concern over the cotton situation in the country and proposed policies to enhance the role of cotton to its rightful place in the economy of Pakistan. The policies proposed by different bodies at different times have also, more or less, been the same but the results have generally been disappointing. It was not long ago that Pakistan used to meet all its cotton manufacturing requirements from its local production and also produce extra cotton to export but its domestic output has been significantly lower than the demand in the last few years. As against the average annual local mills' consumption of cotton between 13-14 million bales, the average cotton production between FY10-FY15 was only 12.9 million bales which has dropped to 10.6 million bales since then which means that the average shortage in the last few years has been between 3-4 million bales per annum which had to be imported at a great cost to the country. Besides, although Pakistan is one of the top producers of cotton in the world, it has to import better grade cotton for blending and production of export quality textile products. The data also show that production shortfalls have been the result of reduced area under cotton crop and lower yields. All of this is a matter of great concern because cotton is a very important cash crop of the country, contributing 0.8 percent of GDP and 4.5 percent in agriculture value-addition besides absorbing a large portion of labour force of the country and earning about 65 percent of the total export receipts in various forms.
So far as the policies to increase cotton production and improve its overall quality are concerned, KCA's list of policy proposals makes ample sense but some of them are hard to implement. For instance, it is easy to suggest to provide certified cotton seeds to farmers and take measures to import pure and unadulterated pesticides but it is difficult to follow such a policy in letter and spirit when corruption in society is rampant, everybody is after making more money by hook or by crook and punishment to the guilty is very rare. A switch over to modern farming is also equally difficult in the absence of high literacy rate and poor extension services to guide the farmers properly. Besides, it is not easy to induce the farmers to increase the acreage under cotton production when the returns to overall investment in Punjab for sugarcane were Rs 237 per day of crop duration compared to Rs 225 per day for rice and Rs 209 per day for cotton farmers. In Sindh, sugarcane farmers received Rs 237 per day of crop duration compared to Rs 205 for cotton farmers. It seems that the existing policies for cotton need to be reviewed but a fresh set of proposals need to be strictly in conformity with the realities on the ground and easily implementable to yield the desired results. Some of the analysts would suggest government intervention to do the needful but care should be taken to ensure that such an intervention is not in the form of another burden on the budget, which is already overburdened.

Copyright Business Recorder, 2019