In its meeting the other day, Economic coordination Committee of the cabinet took a commendable decision of withdrawing all duties and taxes which had been levied five years ago on the import of cotton. From January onward duties and taxes free import of cotton has been allowed from Afghanistan and Central Asian State via land route to give further impetus to growing production from textile industry. The last PML-N government has imposed one percent custom duty in addition to 5 percent sale tax on the import of cotton from India in 2014-15.
In the succeeding years 3 percent regulatory duty, 2 percent additional custom duty and 5 percent sale tax were slapped on the import of cotton. Continuous decline in the local production of cotton and the punitive duties and taxes made the textile products non-competitive in the international market. Consequently local entrepreneurs shifted 40 percent textile units to Bangladesh in the pursuit of zero duty and tax free import of cotton, dyes, and chemicals and above low electricity and gas tariffs. It is worth mentioning that by virtue of favourable economic environment, Bangladesh exports textiles worth $27 billion although a single cotton plant is not grown there. On the contrary due to unfavourable economic environment earnings from the exports of all goods has remained stagnant at $21 billion. The industry was promised gas and electricity supply on subsidized rates which is yet to be fulfilled.
The textile industry is now on the revival path with a modest growth in production. During the past five months textile shipments to overseas markets have increased by 4.68 percent, earning foreign exchange of $5.76 billion. Textile products contribute over 50 percent to the value of exports every year. The average growth in production over the past 11 months is one percent. Productivity has been enhanced with the induction of new technology by importing machinery worth $480 million.
Duty and free import is not feasible solution to provide competitive edge to textile industry. In the ECC meeting Advisor on Finance, Dr. Abdul Hafeez Sheikh directed the Ministry of Food Security to devise a comprehensive policy in consultation with relevant stakeholders to boost local production. There is shortfall of 5 million bales in cotton production as the yield this year has been estimated 1.20 million bales against the set target of 15 million bales. It merits mention that the stakeholders comprising representatives of farmers growers and APTIMA have been persistently demanding for an incentive package to cotton growers. In September, on the instructions of National Assembly Speaker Asad Qaisar, subcommittee of the National Assembly Special Committee on agriculture products met under the Chairmanship of Syed Fakhar Imam. The meeting was also attended by scientists, researchers, cotton growers and international organisations. After through deliberation workable recommendation including support price, better quality seeds and other incentives had been worked out, which can provide useful input for the policy formulation to boost cotton production. The representatives of international organisations who attended the subcommittee meet had noted that cotton production had remained stagnant over the past three decades. In the province of Sindh, 25 percent cotton crop was destroyed by heat wave. Pakistan has now been ranked 6th most vulnerable country to climate change. It necessitated evolving of such variety of seeds that germinates into crops which have adaptability to changing weathers pattern.
Depleting fertility of agriculture land is also responsible for low production of cotton crop. A survey of Punjab Agriculture Department reveals that insufficient and unbalanced use of fertilizers and subsoil depleting reserves of natural organic matters has decreased the fertility of agriculture land under cultivation. It has become extremely deficient in potassium and other minerals. These inefficiencies have not been addressed in the Agriculture Emergency Programme of the present government.
