The Lahore Chamber of Commerce and Industry (LCCI) has asked the government to declare a cotton emergency in the country as the historic dip in cotton production has started damaging the economic chain, a statement said on Thursday.
This crisis-like situation in cotton production has severely affected the textile sector, other industries directly or indirectly associated with it and ginners, and growers, LCCI President Mian Tariq Misbah, Senior Vice President Nasir Hameed Khan, and Vice President Tahir Manzoor Chaudhry told the media on Thursday.
The LCCI officials said that textile was the largest export-oriented sector as it contributes around 60% to total exports of the country.
Cotton production has been seeing a continuous decline since 2017-18 when the harvest was around 11.9 million bales. In 2018-19, production declined 17.5% to 9.8 million bales and further went down to 6.9% to 9.18 million bales in 2019-20.
The LLCI office-bearers pointed out that the cotton yield had also suffered a persistent decline since 2017-18 when it stood at 753 kg per hectare. This has had detrimental effects on textile exports from Pakistan and brought them down from $13.58 billion in 2018-19 to $12.78 billion in 2019-20, they added.
The textile exports stood at $6.62 billion in the first six months of the current fiscal year (Jul-Dec 2020) as compared to $6.82 billion in the same period of previous year (Jul-Dec 2019). The decline in the domestic cotton production has also led to an increase in the cotton import bill.
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The LCCI officials also emphasized the need for serious measures to address issues of low water availability and pest attacks, which were hindering cotton production, yield and ultimately textile exports. They also suggested the government to take China’s assistance if necessary.
Ginners criticize govt’s lack of focus on cotton production
Last month on January 18th, Pakistan Cotton Ginners Association (PCGA) had alerted the government regarding the drastic drop in cotton production. They urged the government to take emergency measures to improve cotton yield to cut down losses worth billions and to secure livelihoods.
PCGA Chairman Dr Jassu Mal and other leaders stated that the cotton production had reached the lowest level in three decades. Requesting the government to take concrete measures to address the issue, Mal said the country was “facing a direct loss of $2 billion annually and $8 billion indirectly due to the drop in cotton production”.
PCGA asked the government to establish a cotton control board to achieve a production of 20 million bales and safeguard the interests of research, sowing, pest management, picking, ginning, spinning and value-addition sector. They also demanded for the implementation of a cotton crop zoning system.
Cotton vital for Pakistan’s economy
Pakistan economy is primarily agricultural in character and cotton is the most significant industrial raw material that is produced by the country. However, lately Pakistan has slipped to being the fifth largest cotton producer in the world and the third largest cotton consumer. The country is unable to meet its cotton production targets and there is no one willing to take the blame.
Cotton production is a source of livelihood for 1.7 million farming families and acts as a raw material to the $12 billion export textile industry. Moreover, cotton picking is also the largest source of employment for the village women. It contributes 8.5 percent to Pakistan’s GDP and is therefore extremely crucial for the economy. It is one raw material that has the potential to offer rural prosperity and fetch enormous foreign exchange.
Considering the resources committed to cotton crop, it becomes even harder to accept the disaster that is the cotton industry. The federal government alone is running three projects including Rs2.3 billion cotton seed project, a Rs592m Pink Bollworm project and a Rs6bn white fly plan but none of them have been able to halt the decline of the crop.
The need of the hour according to LCCI is for the government to declare a cotton emergency as the entire economy would plunge into recession if the production slips further.