Pakistan’s economy is fundamentally rooted in agriculture, with cotton serving as the cornerstone of its agricultural framework and related industries. Cotton is not only essential for the agricultural sector but also plays a critical role in supporting the national textile industry and export economy.
However, over the past decade, the country has faced a sharp decline in cotton production, coupled with an array of challenges that have compelled reliance on imported cotton. This dependency has adversely affected farmers, industrial stakeholders, and the broader national economy. For instance, in Punjab, cotton cultivation this year fell short by nearly 1 million acres from the target, with Sindh experiencing a similar decline.
Several interconnected factors are driving the decline in cotton production in Pakistan. Farmers are increasingly turning to higher-margin crops such as sugarcane, maize, and rice, sidelining cotton cultivation. The failure to announce timely and adequate support prices has eroded farmer confidence, leaving them financially vulnerable and less inclined to grow cotton. Farmers are also burdened with soaring costs of production due to the unavailability of quality seeds, fertilizers, and pesticides, further reducing the appeal of cotton cultivation.
The absence of sufficient funding for the cotton research sector has severely hampered the development of high-yield, climate-resilient seeds and advanced agricultural practices. Institutions such as the Pakistan Central Cotton Committee (PCCC), vital for research and innovation, are struggling with financial constraints. This has stifled progress in agricultural technology, negatively impacting local production.
Pakistan’s cotton production has also been significantly affected by climate change, including rising temperatures, unpredictable rainfall, and extreme heatwaves. Without access to climate-resilient seeds and modern farming techniques, farmers face mounting challenges. Intensifying pest attacks and the spread of diseases have further exacerbated the situation. Despite the availability of expensive pesticides, pest control remains inadequate, compounding farmer losses and discouraging cotton cultivation.
The decline in domestic cotton production has forced Pakistan to rely on imported cotton. This year alone, the country is projected to import approximately 6 million bales at a cost exceeding $2 billion. This significant expenditure on cotton imports diverts precious foreign exchange reserves that could otherwise be utilized for critical developmental projects or strengthening other key sectors of the economy.
The increased expenditure on imports places additional pressure on already dwindling reserves, threatening economic stability. Higher costs of imported cotton are inflating production costs in the textile industry, reducing the competitiveness of Pakistani textile exports in international markets. The textile industry, which contributes nearly 60% to Pakistan’s total exports, is grappling with challenges stemming from limited access to locally sourced cotton. This has disrupted production, reduced exports, and destabilized the economy further.
The ripple effects of declining cotton production have been particularly devastating for farmers. Cotton growers are facing worsening economic conditions due to inadequate support, rising costs, and the absence of comprehensive government policies. Many farmers are abandoning cotton for alternative crops, leading to a continuous decline in cotton cultivation acreage.
To mitigate the crisis and restore stability in the cotton sector, a multi-pronged and sustainable strategy must be implemented. A minimum support price of PKR 10,000 per maund should be announced at least one month prior to the sowing season. This will incentivize farmers to prioritize cotton cultivation.
Quality seeds, fertilizers, and pesticides should be provided at subsidized rates to reduce farmers’ production costs and enhance profitability. Sufficient financial resources must be allocated to agricultural research institutions to develop climate-resilient and high-yield seeds that can withstand environmental challenges.
Textile mill owners should be encouraged to actively support research and development initiatives, as well as local farmers, through partnerships with research organizations like the PCCC. The government should introduce tax incentives to promote local cotton production and reduce reliance on imports. Investment in the agricultural sector is critical to boosting domestic production and revitalizing the cotton economy.
The future of Pakistan’s economy, agriculture, and textile industry hinges on stabilizing cotton production. The current crisis demands an urgent and decisive action to address declining production, support farmers, and strengthen the textile industry. If immediate steps are not taken, the repercussions could be catastrophic for the national economy.
A robust and sustainable policy framework, coupled with collaborative efforts from the government, farmers, and industry stakeholders, is imperative. By implementing comprehensive measures, Pakistan can overcome the challenges facing its cotton sector and regain self-sufficiency, ensuring a stable and prosperous future for the agricultural and industrial landscape.
Copyright Business Recorder, 2024