Economic Coordination Committee (ECC) of the cabinet withdrew 5 percent regulatory duty on the import of cotton yarn till June 30 next year to further increase value added exports. From past several months textile exports are constantly increasing and withdrawal of regulatory duty will help maintain momentum. Last month Minister for industries and Revenue Hamad Azhar said that Pakistan is getting textile export orders, which were previously received by India and Bangladesh. It necessitates further improving in the export environment on sustained basis.
Pakistan used to be cotton yarn and raw cotton exporting country after meeting the demand of its textile industry. Cotton production has substantially declined due to shifting of sugar industry to cotton growing areas of the country. The growers are not getting reasonable amount of minimum support price. The cost of better quality of seeds, fertilizers, pesticides and insecticides is constantly on the rise. This year against target of 15 million bales 8.6 million bales production could be achieved. Locust attacks have also destroyed cotton plantation in the provinces of Punjab and Sindh. Last year output was 10. 7 million bales were achieved.
Contrary to the high expectations of business community and independent economists, PTI government could not succeed to give workable short term and long term policies in the domain of economy, be it industrial policy, trade policy or agriculture policy. Trade policy for boosting exports does not revolve around one or two products. It includes wide range of finished goods and primary commodities. Surprisingly, the government has fine-tuned an export policy which is textiles specific alone and for that too greater reliance is on presumptions about reducing input cost. Pakistan will be the only country in the world which will imaginatively expect high growth in exports by relying on a single item such as textiles while not facilitating export of other items of competitive edge and markets diversification.
A draft of textile policy five years has been approved wherein an ambitious targets of increasing textile exports to $25.3 by 2025. How this quantum leap can be taken to increase textile exports from the current value of $3.47 billion to 9 times more high target within the next five years when the high input cost does not provide competitive edge over the competitors including India, Bangladesh, Indonesia, Vietnam, Thailand and even Cambodia? These countries enjoys tremendous comparative advantage over Pakistan in textiles by virtue of cheap electricity, affordable gas price, application of latest technology, highly skilled manpower and progressive fiscal and monetary policies. In sharp contrast, in Pakistan electricity and gas tariffs are the highest in the world what to speak of this region, industrial technology is stuck in second generation, skilled manpower is scarce and expensive, monetary and fiscal policies are regressive in nature. But the present government is bent upon enhancing its lethal dimension by regularly hiking electricity and gas tariffs.
Some of the salient features of textile policy are quite unrealistic such as increasing the per acre yield of cotton by symbolic increase in the minimum support price of cotton like the one approved by the ECC for wheat. High yield and fine fiber varieties of cotton seeds need to be evolved locally with modern plant breeding techniques; decrease in prices of fertilizers and insecticides , and provision of interest free loans have to small farmers.
How high yield variety of cotton seed can be evolved when the country does not have the required research infrastructure and high caliber experts of plants breeding and genetics? It requires germ-plasma which can be used as starter seed for conducting research for evolving high yield and fine quality fiber seeds for commercial production. The research takes 8-10 years to commercialize the seed production. On the other hand imported seed increase input cost. The Symid Research Institute of American Agronomist Norman Borlaug had extended valuable technical and professional assistance to Pakistani experts of plant breeding and genetics for evolving high yield variety of wheat seed in the decade of 60s. Will this sort of assistance be sought for in case of cotton? There is no indigenous seed bank to keep germ-plasma and use it for producing high quality seeds locally.