The government's claim about enforcing the support price of cotton by November 15 is still in doldrums, while on the other hand the credit limit of the ginning factories has also expired due to no extension by State Bank of Pakistan (SBP), which is causing further delay in payment to the growers, sources told Business Recorder here on Monday.
The bank credit limits to the ginning factories have not been extended by the SBP. This has led the factory owners to face a financial crunch. Low buying of cotton by textile mill owners has also increased the unsold stock available with the ginning factories to approximately 2.2 million bales.
On November 14, Liaquat Ali Khan, Parliamentary Secretary for Food and Agriculture, announced on the floor of the National Assembly that the government had directed the Trading Corporation of Pakistan (TCP) to make arrangements for buying and storage facilities to start procurement of cotton from the market from November 15. It was also claimed that support price of cotton would be announced on the same day.
When contacted, a senior TCP official said that the organisation had not received any directive from the government so far. He also said that the government did not have sufficient funds to procure the commodity.
Earlier, SBP Governor had written a letter to the owners of the ginning factories that their credit limits would be extended to enable them to pay better return to the growers.
Sources said that owners of textile mills were lamenting that due to a sharp decline in export orders by foreign buyers, they were not in a position to buy cotton in the same quantity from the ginning factories like that of last year.
"We have to pay billions of rupees to the growers but without any financial resources. We can provide the farmers better return of their crop", a ginning factory owner said. "If we further delay payments to the growers then it would be a barrier in the cultivation of wheat for 2008-09", he added.
He said that the meeting of the Central Executive Committee of Pakistan Cotton Ginners' Association (PCGA) will be held on November 20, where it would be decided whether to go on strike or to wait further for the announcement of the government about support price of cotton. He said it was regrettable that the false promise of the government about support price, that was to be adjusted on November 15, has frustrated the fond hopes of the poor growers once again.
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