At the inception of Pakistan, the nation emerged as a notable cotton exporter, with only two or three textile mills and an annual production of approximately 1.5 million bales. At that time, the domestic textile industry required 68,000 bales, with an average yield of 370 kilograms per hectare.
Recognizing the economic significance of cotton and the necessity for a robust textile sector, Quaid-e-Azam Muhammad Ali Jinnah established the Pakistan Central Cotton Committee (PCCC) in 1948 under the Cotton Cess Act of 1923. Initially headquartered in Karachi, this institution now operates under the Ministry of National Food Security and Research.
The PCCC’s mission was to promote cotton research through funds generated by a cotton cess collected from textile mills, thereby stabilizing the cotton sector. It is important to clarify that the cotton cess is not linked to domestic production but is imposed on the consumption of cotton bales used in mills, as well as on imported and exported cotton.
Historically, the PCCC has provided exemplary services in cotton research both nationally and internationally. From 1948 to 2015, Pakistan’s cotton production reached significant milestones: 12.8 million bales in 1991-92, 15 million bales in 2004-05, and a bumper crop of 14 million bales in 2014-15. Concurrently, the number of textile mills grew to over 450, ginning factories multiplied, and per-acre yield soared to 750 kilograms. These advancements created millions of jobs in the cotton sector, driven by relentless research and development.
Innovations in cotton farming practices, integrated pest management, pest scouting, crop management, and harvesting and storage techniques can all be attributed to the PCCC’s rigorous research. During the 1980s, when the cotton leaf curl virus (CLCuV) posed a severe threat, PCCC scientists developed resistant cotton varieties, safeguarding the industry’s future in Pakistan. The PCCC’s successful cotton varieties have been cultivated on more than 70% of the country’s land.
However, since 2016, the situation has drastically changed. About 80% of mills, influenced by the All-Pakistan Textile Mills Association (APTMA), ceased paying the cotton cess, severely hampering cotton research and development. Today, the cotton crop faces critical issues such as climate change, pests like whiteflies and pink bollworms, and diseases including CLCuV, all of which necessitate advanced research and funding.
Due to various pretexts and eight years of continuous litigation against a dedicated research institution, cotton research activities have been severely compromised. This has not only impacted performance but also cast a shadow on the credibility of the Pakistan Central Cotton Committee (PCCC), a crucial national entity.
Influenced by APTMA, the textile industry initiated 65 legal cases against the PCCC, of which the PCCC has successfully defended 63, while 2 cases remain pending in the Peshawar High Court. It is perplexing that despite favorable rulings from both the Supreme Court and the Lahore High Court, the textile industry chose to pursue the matter in a lower court.
Despite the efforts of various private and government institutions in Punjab, Sindh, and Baluchistan, as well as additional efforts from agencies under the Atomic Energy Commission, cotton production has not seen significant improvement. This is primarily due to the lack of a unified effort under a central framework. Thus, addressing the organizational and funding issues of the PCCC is crucial for consolidating research efforts and achieving effective results.
Pakistan’s annual cotton production potential stands at 18 million bales, but since 2016, production has stagnated at around 8 million bales. The performance of any institution should be measured by its available resources and the challenges it faces.
Without resolving the issues of research institutions and investing in research, achieving desired production targets is impossible. Countries like the USA, China, India, Brazil, and Australia exemplify successful models where cotton research thrives with the support of the textile industry and government.
Unfortunately, in Pakistan, despite receiving substantial subsidies and government incentives, the textile industry neither supports cotton farmers nor research institutions. APTMA often laments the lower export rates compared to India, Bangladesh, and Vietnam, yet fails to address the fundamental issues affecting the PCCC.
The PCCC remains the largest research entity in Pakistan, possessing invaluable germplasm collections and a team of experienced Ph.D. agricultural scientists. With necessary administrative reforms and adequate funding, the PCCC can be revitalized to meet international standards.
APTMA is urged to comply with the Cotton Cess Act of 1923 and the 2012 amendments by the ECC, which include a 30% increase in the cotton cess rate every three years. The current rate, which was increased to 50 rupees per bale in 2012, urgently needs to be raised to 200 rupees per bale by 2024.
Additionally, mills should promptly settle the outstanding 3.5 billion rupees in cotton cess dues instead of resorting to delaying tactics. If APTMA has concerns or reservations regarding the cotton cess arrears presented by the PCCC, it should undertake a calculation based on annual national production, current cotton stock levels, and annual export figures.
Furthermore, as a representative body of the mills, APTMA should compile and submit data on inactive or closed mills to the authorities, providing a comprehensive final report. This approach would facilitate an amicable resolution of the cess issue.
The Ministry of National Food Security and Research should take stringent legal action against defaulting mills, impose heavy fines, and ensure compliance with cotton cess payments through the FBR. Ensuring fair collection of cotton cess based on total consumption, imports, and exports of cotton products, and requiring mills to obtain NOCs from the PCCC are necessary steps to restore and sustain the cotton research and development sector in Pakistan.
By implementing these measures, Pakistan can revive its cotton industry, ensuring sustainable growth and stability for the future.
Copyright Business Recorder, 2024
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