The struggles of the cotton crop continue as its challenges are unending. The desired production targets elude growers and industry. Last year seed cotton production in Sindh and Balochistan was hit mainly by flooding and torrential rains, leading to a 46 per cent loss in production in Sindh alone, according to some reports.

This year’s harvest started early, especially in Sindh. Farmers were selling their harvest for Rs8,500, or a little over Rs9,000, after the federal government fixed Rs8,500 support price in line with the demand of the All Pakistan Textile Mills Association (APTMA) — the only end user of the crop in Pakistan.

Pakistan Economic Survey 2022-23 reported that cotton production recorded a 0.3pc contribution to GDP and 1.4pc of value added in agriculture. The area under cotton recorded a growth of 10.7pc, but production remained low at 4.910 million bales (against 2021-22’s 8.329m bales), showing a dip of 41pc.

This was due to floods that swept away the crop in Sindh and Balochistan. In Punjab, the cotton-producing districts of Rajanpur, Dera Ghazi Khan, and Taunsa were the worst hit and damaged the cotton crop.

Cotton, a major cash crop, continued to face challenges ranging from contaminated cotton production, lower per-acre yields, uncertified seed, and inadequate prices for farmers.

It has left farmers alienated in the whole scheme of things. Cotton producers are losing interest and prefer crops like sugar cane and paddy while the government continues to be disinterested in reviving cotton.

Sindh has seen growth in the sugar industry in cotton-growing areas, especially in Ghotki, where five sugar mills have been set up

Sindh’s ginners stopped buying crops at support prices, arguing that the international market remains depressed, and hence they are unable to offer the support price.

Cotton ginning factory owners and former Pakistan Cotton Ginners Association chairman, Dr Jassu Mal, insisted the government should intervene through the Trading Corporation of Pakistan (TCP) to purchase lint cotton from them so that they could pay Rs8,500 to growers.

Dr Mal points to other issues like the production of contaminated cotton, the unavailability of grade 1 and grade 2 seed cotton that matters in the international market, and the monopoly of APTMA domestically.

Growers have their own axe to grind. “Farmers grow cotton when they can’t grow another like paddy or sugarcane during Kharif season in Sindh,” admitted Syed Mehmood Nawaz Shah, a progressive cotton producer and Sindh Abadgar Board (SAB) vice president.

According to him, sugarcane and paddy have encroached cotton’s area. “Sanghar, Pakistan’s largest cotton-producing area historically, is witnessing paddy cultivation, though illegally, and rice mills are set up there. What does this trend suggest?” Mr Shah said.

From the farmers’ perspective, cotton is not as protected as sugar cane. The government fixes the latter’s indicative price under the Sugar Factories Control Act, and farmers are paid the price. They even qualify for payments of premium if sucrose recovery crosses the benchmark.

Sugarcane’s price will most likely be fixed at Rs400 per 40kg in 2023-24, encouraging growers to opt for cane.

However, Sindh’s existing industry doesn’t get ideal cane supplies to meet the demand for installed crushing capacity and millers often shut factories unless procurement improves.

Sindh has seen growth in the sugar industry in the cotton growing areas, especially in Ghotki, where five sugar mills have been set up by Punjab-based wealthy millers as political favours to take away cotton’s acreage.

Millers have obtained farmland in riverine areas to grow sugarcane on large swathes of land to keep supplies of cane to mills for crushing going in addition to supplies from neighbouring Rahimyar Khan.

“Cotton has not been given the importance it deserves. It keeps struggling without planning though it can otherwise produce better results considering its long value chain,” contended former chairman of Pakistan Agriculture Research Council Dr Yusuf Zafar, who has been instrumental in having the cotton sector placed under the Ministry of Food Security and Research (MNFS&R) from its erstwhile textile ministry.

“It took plenty of time to convince the government to place cotton under MNFS&R as nowhere in the 65 cotton-producing states is this crop handled by the textile [ministry],” he explained. He held APTMA and the government both responsible for lacking policy decisions and for the decay in the cotton sector.

Pakistan Central Cotton Committee (PCCC) — Pakistan’s main body to oversee the cotton sector — tasked with research-based initiatives for cotton growth is struggling to survive. In the absence of funding for research programmes, its 1,100 or so employees suffer. PCCC owns cotton research institutes in Multan and Sakrand in Sindh but is now without any qualitative input.

PCCC manages its financial affairs through the recovery of cotton cess, Rs54 per bale, levied on mills. APTMA has refused to pay since 2016, leaving the PCCC high and dry due to pending litigation dues accumulated to Rs4 billion and increasing. Special funds have to be released to allow the PCCC to pay salaries and pensions.

The Economic Coordination Committee (ECC) discussed it lately and was informed that due to litigation, the cess collection was reduced from Rs532 million in 2014-15 to Rs207m in 2021-22. In July 2022, actual cess-based income was just Rs16.33m.

Furthermore, APTMA did not come up with programmes that may have led to cotton’s growth or benefited farmers as it was more interested in winning subsidies and concessions like their sugar counterparts.

“APTMA wants Bangladesh model where cotton is imported, and then it goes to achieve boom in textile exports at a whopping $30bn volume when compared with Pakistan’s $16bn. Has the textile industry increased exports impressively?” asserted Dr Zafar.

“Research doesn’t take insofar as integrated pest management is concerned. The irony is that despite issues of a grave nature, no planning is yet seen at the government level for cotton’s revival. So inclination of farmers towards sugar cane [which remains pestfree] and paddy is natural,” said Mr Shah.

Cotton ginner Dr Jassu Mal said APTMA’s monopoly should be done away with. “The entire burden of various tax recoveries on ginned cotton is passed on to growers. APTMA gets many concessions, yet they are unwilling to buy lint cotton from us,” he said while detailing the nature of losses at the picking and ginning stages. Ginning in Pakistan is traditionally saw-ginned instead of roller-ginned to avoid wastages with a huge monetary cost.

Cotton was said to have a healthy outlook and acreage has increased from 3m acres to 4.6m acres this year, according to Khalid Mehmood Khokhar of Pakistan Kissan Ittehad and PCCC’s member from Punjab.

However, next year seems less promising. “We get Rs6,000-7,000 instead of the promised price of Rs8,500. Does the government think farmers will opt to grow cotton next year?” he said.

At a recent meeting, the federal cotton commissioner Zahid Mehmood told farmers that the lint price of 40kg in the international market is Rs23,500 against Pakistan’s Rs16,000-17,000, yet millers were not procuring it from ginners, Mr Khokhar disclosed.

According to agriculture department figures, Sindh achieved an impressive 4.2m bales in 2009-10 against the 3.2m bales target. In 2022, 1.6m bales were produced, and in 2021, 3m bales were produced.

The boom in cotton production in Sindh was previously attributed to the use of Bt cotton. This seed has lost vigour now. Adulterated and uncertified seeds have flooded the market sans any checks.

When will the government’s disinterestedness in reviving cotton end?

Published in Dawn, The Business and Finance Weekly, July 17th, 2023