The Pakistan Tanners Association (PTA) has strongly opposed the decision of Economic Co-ordination Committee (ECC) of the Federal Cabinet to allow export of live animals describing it harmful to the country's economy.
Talking to newsmen the Ex-chairman PTA, Khawaja Muhammad Yousaf said, 'The decision has been taken without any consultation with the stakeholders that are meat, leather and woollen industry.'
He said the ECC's decision is based on the recommendations of the Ministry of Livestock and Dairy Development (MLDD) and the Ministry of Food, Agriculture and Livestock (Minfal). Pakistan is a protein deficient nation and per capita consumption of meat and beef is very low due to higher prices.
The government has allowed export of live animals to earn Rs500 per animal without considering that they already get much higher amount, if meat and beef is exported instead of live animals. Further, leather export increased by 21 percent during the year 2007-08. 'Major source of raw material of our leather industry is indigenous hides and skins. Now with this decision the export of leather is also expected to decline,' he added.
Yousaf also maintained that the export of live animals from Pakistan would have serious setback in tanning, footwear and leather garment and gloves industry. This would also affect the country's woollen and carpet industry, which is already operating at 55 percent capacity due to shortage of hides, skins and tanners. 'We have recommended to the government to discourage export of wet blue leather from Pakistan, as being done by India, Iran, Bangladesh and China,' he maintained.
The tanning industry provides jobs to more than1million people- directly and indirectly., he said adding that the prices of beef and meat, which are already out of reach of low-income group, would increase further making it a rare commodity for the consumers.
'The ECC's decision will leave many workers of woollen, carpet and leather industry unemployed,' he feared and demanded setting up of modern slaughterhouses in the country to encourage the export of beef and meet rather than selling our live animals. 'This decision will have similar consequences as the decision to export wheat had on the economy during 2007-08.'
The PTA also opposed the Federal Bureau of Revenue's (FBR) proposal to increase withholding tax on exports, imports and cash withdrawals. 'Increasing withholding tax will prove last nail to leather industry, which has already recorded a decline of eight percent in the last five months of current financial year over the same period of last year,' the Ex-chairman PTA said.
Furthermore, the governments of India, China, and Bangladesh have announced various incentives for the leather industry he said. 'We should learn from policy makers of neighbouring countries, who have announced a number of incentives for their export sector,' he said.
Further, he added that any tax burden on import of industrial raw materials like chemicals, accessories and raw skins will make our products in competitive against India, China, Bangladesh, and other countries. The former PTA Chairman suggested that such taxes should be charged only on luxury items and any further tax burden on exports, would cause serious damage to our economy on long-term and the country would get trapped into a vicious circle losing its pride in the world community.
'Our policies should be focused on exploring the means to get rid of the IMF and other world agencies and this was only possible by increasing our exports,' he believed.