The textile sector of the country would become zero-rated after getting the European Union's Generalised Scheme of Preferences (GSP) by 2014, revealed Shahid Rasheed, Secretary of the Ministry, while briefing the Senate Standing Committee on Ministry of Textile Industry, which met with Mushahidullah Khan in the chair, here on Thursday.
Pakistan has ratified all the 27 conventions required for getting the EU's GSP status; however there are several issues which come under provincial jurisdiction, which are yet to be addressed, he added. Pakistan will apply for GSP Plus status in January 2013 and after getting formal approval from the EU's Council of Ministers by September 30, 2012, the country will be eligible for the concession by January 2014. There would be no cap on any textile product import to the 27 countries of EU and the country will be in a better position than Bangladesh with whole textile chain in hand.
A small EU concessional package has been implemented from November 15, 2012 with a 10-month delay, where the country is expected to get benefits to the tune of $500 million, the secretary added. Due to multiple reasons including power and gas shortage, a loss of $2.2 billion has occurred each year to the textile sector of the country, the secretary revealed.
The government has allowed investment by Pakistani residents including firms and companies for investment in companies abroad with prior approval of the State Bank of Pakistan (SBP). By virtue of this circular, the SBP approved 34 textile companies to invest outside the country.
Due to tariff concession, easy market access, better law and order and good energy supply in Bangladesh, some textile industries of Pakistan moved there. Availability of utilities, low utility price and subsidies that have been provided by competitor governments are disadvantaging our textile exports, he added. Textile sector not only accounts for around 60 percent of our total export earnings but also provides 40 percent of industrial employment, contributes nearly 8 percent to the country's GDP, produces 24 percent of industrial value-added and consumes 40 percent of bank credit to manufacturing.
To address the issues of textiles sector and make it self-sustainable, the government approved first-ever Textile Policy 2009-14 in August 2009. The Cabinet while approving the summary of Textiles Policy also approved the proposal that the textile industry will be exempted from load-shedding and would enjoy the same priority as given to fertilizer sector without distinction of being export-oriented. In this regard, a summary has been moved to the ECC of the Cabinet, the secretary added.
Cotton Commissioner Dr Khalid Abdullah said there are many reasons for low yield of cotton crop in Pakistan including high price of agriculture inputs (seeds, Fertilizers, pesticides, etc), higher intensity of insect and pest attacks, shortage of good quality and suitable variety of seed, deficiency of water, lack of advanced technologies, awareness and lack of agro-professionalism.
The incidence of Cotton Leaf Curl Virus (CLCV) disease, the most serious threat to Pakistan's cotton, has declined. Only 28 percent of CLCV incidence was recorded in 2011-12 compared to 72.8 percent in 2010-11. Similarly, cotton mealy bug damage also remained lower than the last years. However, new pests red cotton bug and dusky cotton bug have emerged as a potential threat to cotton yield and lint quality, as the insects feed on cotton seed and leave yellow spots on cotton fiber, he added.
Khalid said as per Cartagena Protocol on bio-safety, commercialisation, trade and research on Genetically Modified Organisms (GMO) including BT cotton are subject to the enactment of bio-safety laws and establishment of bio-safety Committees at Institutional and National level. Pakistan signed the Cartagena Protocol in 2001, but it was ratified and enforced in 2009. Prior to 2009, research, import and commercial cultivation of BT cotton or GMO was illegal in Pakistan. Since India and other countries enforced bio-safety laws prior to Pakistan and allowed commercial cultivation of BT cotton, the obvious increase in production of BT cotton cultivation has mesmerised Pakistani cotton growers. The seed of BT cotton were thus smuggled from India and Australia. However, none of the smuggled variety proved successful in Pakistan as none was resistant to CLCV.
Pakistan's cotton grower showed overwhelming response to BT cotton (legal or illegal) and its area increased from 5.6 percent in 2006 to 57 percent in 2009, just before the legal BT varieties were introduced and a 10 percent incremental change was noticed after the introduction of legal varieties. (76.3 percent (76.15 percent in Punjab and 78 percent in Sindh) during 2011-12, 66 percent (68.8 percent in Punjab and 70 percent in Sindh) in 2010-11), Khalid added.