EDITORIAL: With cotton production dropping almost 50 percent, ginners sounding the alarm, textile exporters forced to import yarn and farmers considering other crops for the next season, the government is already behind the curve in dealing with what could become a full-blown crisis for the agriculture as well as the flagship export sector.
That all this is happening just when the sector is flush with orders because of India’s declining trade with Bangladesh and the latter’s own political and economic breakdown goes to show just how blind authorities have been to both changing global trends and the problems in the local agri sector.
Exporters continue to face severe capital shortages due to billions of rupees stuck in delayed sales tax and duty drawback refunds. And farmers complain that cotton farming has become “considerably less profitable than competing crops like sugarcane, maize, rice and sesame”.
They are neither provided with a support price nor offered subsidies on agriculture inputs. There’s still no organised market for such an essential crop, which also feeds the country’s main export industry, which adds to their problems.
Then there are the ever-present middlemen and commission agents that continue to squeeze the margins of growers. No wonder, then, cotton production and area under cotton cultivation are constantly shrinking. Stakeholders still trying to wrap their heads around the government’s apparent compulsions about the support price and subsidies and justifiably question the inaction at least as far as these middlemen are concerned. But there’s still no answer.
The Pakistan Cotton Ginners Association (PCGA) has been running from pillar to post about all this, reminding the government that centrality of cotton to export and ultimately economic growth makes increasing production a “national responsibility”.
It turns out also that the Task Force on Agriculture has been holding talks with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Federal Board of Revenue (FBR) about the industry’s tax issues, complaining how excessive taxation has “severely impacted the sector”.
It is unfortunate that for far too long successive governments have taken the entire agriculture sector for granted. As a result, it has lost the status of a natural comparative advantage and Pakistan has been reduced from a one-time net exporter to a chronic agri importer. Yet it’s much worse that the government is still groping in the dark; even as the crisis now threatens to spread into the export sector.
Copyright Business Recorder, 2024
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