PAKISTAN’S reliance on imported cotton has surged, with 1.192 million bales already shipped from the United States, making it the largest buyer globally. This trend, fueled by lower domestic production and tax-free import policies, poses significant challenges for the local agricultural and textile sectors. Below are key recommendations for the government to strengthen Pakistan’s cotton industry:
Currently, domestic cotton producers are disadvantaged by the 18% sales tax on local white lint, while imported cotton and yarn are exempt from such taxes. This policy incentivizes textile mills to prefer imports over local production, leading to depressed prices for local cotton and financial strain on farmers. The government should revisit these tax policies and introduce incentives or subsidies for local cotton to ensure competitive pricing and encourage millers to source domestically.
Adverse weather conditions have significantly impacted the quality and yield of local cotton. To mitigate these challenges, the government should increase funding for agricultural research to develop weather-resistant and higher-yield cotton varieties. Collaboration with research institutions and international bodies could lead to innovations that improve the resilience and productivity of the crop.
To compete with international producers, Pakistan must modernize its farming techniques. This can be achieved through the promotion of mechanized farming, provision of modern equipment at subsidized rates, and training programs for farmers to adopt best practices. Enhanced irrigation methods and precision agriculture could also play pivotal roles in increasing cotton yield.
The government should establish a fair and transparent pricing mechanism to protect cotton growers from market volatility. Setting up a minimum support price for cotton can help stabilize the market and ensure that farmers receive fair compensation for their produce.
Reports indicate that Indian yarn is entering the local market through Dubai, undermining local producers. To protect the domestic industry, it is essential to bolster customs checks and implement stricter regulations to curb the illegal entry of yarn and other textile products.
Sustainability is becoming an increasingly important factor in global trade. The government should encourage practices that minimize environmental impact, such as organic farming and integrated pest management. These efforts will not only improve the quality of local cotton but also align Pakistan’s agricultural exports with international sustainability standards.
Collaborations between the government and private sector can provide much-needed resources and expertise to revamp the cotton industry. Such partnerships can help in setting up state-of-the-art ginning facilities, improve logistics, and enhance the overall supply chain.
—The writer is former Regional Executive Inclusive Development at NBP, Mirpur AK.
