Sartaj-led body asks government to raise cotton research expenditures to Rs one billion

Deputy Chairman Planning Commission, Sartaj Aziz-led committee has recommended to the government to double expenditures on cotton research to Rs 1 billion, fix production target of 25 million bales and provide a level playing field to all commodities. It also suggested the government to free some land from sugarcane for cotton cultivation for increasing production and making it a profitable crop for farmers once again.
The Cabinet on January 10, 2018 decided that Sartaj Aziz should study the cotton production pattern with the ministries concerned and other stakeholders and submit a report to the cabinet within a fortnight. The sources revealed that recommendations have been finalized after holding two meetings with the stakeholders and would be considered in the upcoming cabinet meeting.
According to the documents, it has been clarified from the analysis of the basic causes of the current cotton crisis that no single measure will address these causes. There is a need for a well-coordinated action plan to address different dimensions of the crisis simultaneously to make cotton a profitable crop for the farmers once again.
The committee recommended that under the proposed cotton policy, a production target of 25 million bales be fixed for 2025 through a multi-stakeholders driven program, covering the whole value chain of cotton crop. To achieve this target, area under cotton would have to be increased from 2.4 million ha to 3.5 million hectares and the average yield from 750 kg/ha to 1200 kg/ha.
These targets are absolutely essential for achieving sustained growth of the economy and the textile sector as well as for addressing the problem of the current account deficit. But these targets would be difficult to achieve unless the policy framework which may provide incentives or disincentives for different crops is reviewed.
Excessive incentives for sugarcane in the form of a minimum purchase price for cane and then export rebate on sugar has been a major factor in the decline of area under cotton. The present policies have led to sugar surpluses which cannot be exported without further subsidies. The resultant glut in the market has depressed local prices to a level at which the mills cannot purchase sugarcane at the prescribed minimum purchase prices of Rs 180-182 per 40-kg. This policy has created disincentive for cotton crop which competes for same land. A level playing field to all commodities can free some land from sugarcane for cotton cultivation and help achieve the target or 3.5 million ha under cotton by 2025.
One way to provide a level playing field for cotton on the basis of comparative economic criteria is to link the price of sugarcane to the wholesale price of sugar in a given crop year. Since the cost of sugarcane accounts for about two-third of the final prices of sugar, the sugarcane sellers are paid two third of the average price which sugar mill receive in a year. In practice, about 70-80% of the expected price is paid at the time of delivery and the rest at the end of the season. The Ministry of Food Security can examine, in consultation with the provincial governments and sugarcane growers, if such a system is feasible. The present policy of fixing an unrealistically high purchase price for sugarcane has led to a serious crisis for sugarcane growers and also caused a serious decline in the area under cotton cultivation.
The investment in agricultural research in Pakistan when compared to other countries has always been low (only 0.18 of agricultural GDP) but that in cotton it has been declining further. From the start Cotton R&D has been financed through a cotton cess. Present rate of cess is Rs 50 per bale and being collected through the Pakistan Central Cotton Committee (PCCC). In recent years actual cess collection has averaged about 85 percent (Rs 625 million in 2016-17) but has now fallen to 40 percent (Rs 290 million) due to the reluctance of the textile industry to finance an inefficient research programme. This paradoxical decline in cotton research has to be reversed as a matter of high priority through: (I) restructuring of the PCCC to revive the confidence and contributions of the textile industry and; (II) expanding and revitalizing cotton research through public funding, maintained in the recommendations.
The government should adopt public private partnership model and double the total expenditure on cotton research from the annual average of about Rs 500 million in the past decade to Rs 1 billion over the next five years by allocating an amount of Rs 2.5 billion from the PSDP. The Pakistan Agricultural Research Council (PARC), the apex organization for agricultural research, should be given the responsibility to prepare an innovative crash program (PC-I) for cotton research on the following lines.
The proposed allocation of Rs 2.5 billion (500 million a year over 5 years) will be utilized primarily for providing competitive grants to public and private sector research institutions for priority research to designated priority areas. The funds will be used for actual research, equipment, material, and high-level foreign consultants but not for staff salaries.
An inter-provincial committee under chairman PARC consisting of provincial representatives and best cotton experts will approve their grants after inviting proposals through an open advertisement.
The priority areas for these grants will include programs to modernize cotton system to different parts of the country including: a) germplasm and machinery necessary for the adoption of the latest technologies; b) strengthening the regulatory regime against the use of substandard Bt varieties; C) to provide a conducive environment for local and international companies to introduce latest St technologies in Pakistan; d) wider the genetic base of cotton production to address, not only the problems of insect pests but also of diseases especially the CLCV.
Further there is an urgent need for evolving a model of public private partnership for variety development. Modern day variety development needs involvement of various players from the research and commercial setup where research provides the improved genetic material and distinguishing traits while commercial setup markets the variety. It will be highly advisable to confine the role of the public research institution to the provision of breeder or basic seed only. To use the material further trait insertion or marketing should be done by the commercial companies by entering into agreements. This could be done by formulating a public auction system for private sector access to publicly bred cotton varieties while building incentive for breeders for generating healthy competition.
Cultivation of cotton in Balochistan specifically and in Khyber Pakhtunkhwa generally has a huge potential. Recently harvested cotton in Balochistan is of high quality. With the provision of irrigation water in Balochistan through Kachi Canal and other irrigation projects, a big area is coming under cultivation. Efforts should be made to see the feasibility of cotton cultivation in newly available arable lands. A similar opportunity is also available in Gomal Zam command area and southern part of KP.
Such improvements, however, will not live long unless demand for high quality cotton lint is created from the spinning industry, by shifting the current weight-based pricing to quality-based pricing. A major shift is required in the regulations that determine the bale characteristics. A bale made by the ginners must contain a label showing all quality features and standard bale weight. This will help promote the quality regime from the supply side. Cooperation from Pakistan Cotton Ginners Association and APTMA will be necessary to improve the ginning technology in Pakistan, which will benefit both.
Cotton is a very sensitive plant and promptly responds to biotic as well as a biotic stresses. Several yields limiting factors such as diseases including CLCV, insects and weeds can be managed by adopting better crop husbandry.
Date of sowing, use of good quality seed, quality and timing of pesticide application and water use management at field level play very important role in deciding the final output. The provincial governments should intensify their extension efforts to promote better crop management for cotton. Extension system can be modernized through the use of IT and cell phone services.
Another factor that affects the profitability of cotton crop is the timing of cotton import. As a matter of policy, the import of cotton should not be allowed during cotton picking season. Hopefully during coming years as a result of implementation of right kind of cotton production initiatives, the import of cotton might not be needed.