Reforms sought to save textile sector

Falling cotton yields, rising imports threaten stability; $5b import bill likely

Listen to article

KARACHI:

Cotton brokers, traders, researchers, and agriculturalists have called for urgent revitalisation of the cotton sector, stressing the need for concrete and actionable initiatives rather than policy rhetoric. Taking decisive measures is now unavoidable; otherwise, the country will continue to face declining cotton yields, endangering its economy, foreign exchange reserves, and the long-term sustainability of its textile industry.

Speaking to The Express Tribune on Saturday, they noted that for the 2024-25 season, the Federal Committee on Agriculture (FCA) had set a production target of 10.87 million bales; however, actual output stood at a mere 5.5 million bales, marking the second-lowest cotton production in the country's history.

In Punjab, cotton was cultivated over 3.2 million acres, producing 2.7 million bales, while in Sindh, 1.55 million acres yielded 2.8 million bales, demonstrating relatively better performance than Punjab. They pointed out that Pakistan has already imported approximately 3.5 million bales of cotton, with further imports expected. If this trend continues, cotton imports could reach up to $5 billion, adding significant pressure on the country's foreign exchange reserves and trade balance.

According to well-placed sources, one of the primary reasons for this decline is the financial and administrative crises within the Pakistan Central Cotton Committee (PCCC), under the Ministry of National Food Security and Research. The PCCC has been struggling for over a decade, mainly due to the textile industry ceasing cotton cess payments since 2016. This funding shortfall has halted research activities, delayed scientists' salaries, and disrupted the development of improved seed varieties, severely impacting the country's cotton research and development efforts.

Despite over 22 public and private research institutions working on cotton in the country, a lack of coordination, institutional fragmentation, and professional rivalries have hindered the effective transfer of research findings to farmers.

Historically, the country achieved bumper cotton crops when research and development were streamlined under an integrated system. Revitalising the PCCC as a central regulatory body and bringing all research efforts under its umbrella is the need of the hour to ensure effective outcomes in cotton productivity. Another key factor behind the decline in cotton production is the shift towards more profitable crops, such as sugarcane, rice, maize, and sesame.

The lack of a support price for cotton and unfair market pricing mechanisms have discouraged small and progressive farmers from cultivating the crop. The dominance of middlemen further reduces farmers' profitability, pushing them towards alternative crops with higher financial returns.

Climate change is also a major challenge, with extreme heatwaves and erratic rainfall patterns significantly impacting yields. In June and July, temperatures soared to 48°C, causing widespread fruit shedding and substantial yield losses. Moreover, pest infestations, particularly pink bollworm and whitefly, have further worsened the situation, with limited access to genetically improved seeds compounding the crisis.

Regarding policy flaws and shortcomings, the 18% sales tax on local cotton has created market uncertainty, taking a heavy toll on both farmers and the textile industry. Without immediate policy interventions, Pakistan's cotton sector could experience an even sharper decline.

To stabilise cotton production for the 2025-26 season, agriculturalists outlined urgent reforms, including revitalising the PCCC, recovering outstanding cotton cess payments from the textile industry, and reinvesting these funds into research and development. They also called for the introduction of a minimum support price for cotton and the removal of the 18% sales tax to ensure price stability.

They urged for maximising early cotton sowing to achieve higher yields. Early planting allows the crop to develop a stronger root system, avoid peak pest infestations, and utilise the best climatic conditions. Encouraging farmers to sow cotton as early as possible with the help of modern agronomic practices and extension services is essential for boosting production.

Karachi Cotton Brokers Forum Chairman Naseem Usman warned that the country could face a significant shortfall of 5 million bales this year. He noted that the federal government has not yet set a target for next year.

"Cotton is being imported from Brazil, America, South Africa, Argentina, and Australia, while approximately 700,000-800,000 bales of cotton will be imported from Afghanistan this year. For the last two years, the textile industry has been facing a serious crisis due to higher energy tariffs and the cost of doing business. If the industry had been growing, more cotton could have been imported, and the import bill for cotton would have ballooned to a great extent," Naseem Usman said.

Sajid Mahmood, Head of Technology Transfer at the Central Cotton Research Institute (CCRI) Multan, said, "Pakistan's declining cotton production poses a severe threat to the economy, agriculture, and textile industry."

Additionally, he called for capacity-building programmes for farmers, including modern training initiatives, workshops, and field demonstrations to equip them with advanced cultivation techniques. Furthermore, he advocated for accelerating the adoption of genetically modified, pest-resistant cotton varieties.