Delay from govt over cotton intervention price likely to impact growers

The sub-committee of National Assembly Standing Committee on Textile Industry had recommended fixing the minimum guaranteed price of cotton at Rs 2700 per 40 kg for the financial year 2015-16 after considering the cost of production. Delay from government to decide on cotton intervention price for the current season is likely to leave growers without due benefits. As Cotton growers in Pakistan are not given any subsidy, they have to compete with the prices of subsidized cotton.

The National Assembly Standing Committee on Textile Industry and the Ministry for National Food Security and Research, after having detailed discussion unanimously agreed to fix the intervention price of cotton at Rs 3000 per 40 kg for the financial year 2015-16. It was further decided to take the provincial governments of Sindh and Punjab onboard for implementation mechanism. However, sources said that meetings are yet to be arranged with chief ministers of both the provinces.

Without the input by the provincial governments, the matter may further linger on which would have a negative impact on the growers, the sources said, adding that Punjab government held internal meeting where DG Agriculture had briefed Chief Minister on the cotton intervention price issue.

The ministry of textile industry has also written to the chairman National Assembly Standing Committee requesting for a reminder to the provincial governments as one-month has passed since the committee took the decision. Initially, the ECC approved Rs 000 per maund of seed cotton (Phutti) and corresponding price for lint cotton was fixed at Rs 6,864 per maund for procurement of cotton from ginners.

Following the ECC decision, the Trading Corporation of Pakistan (TCP) in second week of November, intervened in the domestic market and started procurement of the commodity to stabilize cotton prices. However, the late decision proved to be not much beneficial for the farmers and objections were raised after which cotton procurement was suspended after procurement of less than 100,000 bales. Sources further said that TCP is likely to be made bound to procure at least two million cotton bales for this year.

The officials sources revealed that the government may procure seed cotton instead of lint cotton on experimental basis, as per Indian model of cotton procurement. The cotton price may be fixed in between the import and export parity prices. The lint cotton is exported as well as imported by Pakistan and during this course of business activity a lot of revenue is being spent, which may be avoided through the import of only long staple cotton which is required for fine quality cotton in certain textile sectors.