The production of less than 10.50 million bales of cotton can be alarming for the economic growth since cotton is the most important building brick of the country's economic structure. Experts are criticising some of the key ministries, including Agriculture, Commerce and Finance for showing lack of interest in handling a major national issue.

The committee will investigate why the pest attack could not be controlled despite the application of successive sprays on the cotton crop. But several factors other than pest attack responsible for the shortfall may not be reviewed by this committee, which means that the whole responsibility of the failure of the cotton crop may be attributed on bollworm, that is one of the natural factors.

It is a harsh reality that successive governments and economic managers always declare the natural factors as the real culprit behind crop failures. Sometimes heavy rains are blamed and next year drought is inculpated for damaging the crop. But there may be hardly any example of policy makers having admitted their fault.

This time several factors, other than pest infestation, are also responsible for the shortfall in cotton production targets. A crisis like situation has emerged in agriculture, textile and trade sectors due to the expected shortfall in targeted output for the year 2003-04 and prices of cotton have reached to new highs breaking all previous records. All these facts are leading to an alarming situation for the economic growth of the country as cotton and textile products comprise almost 60 per cent of the total exports of the country. Poor cotton output is bound to generate another crisis in textile sector and ruin the already deteriorated agriculture sector.

The textile sector has witnessed a long period of turbulence in the previous decade due to virus attack on cotton crop. Cotton has become the most sought after commodity for the industrial sector of the country defying all claims of the government agencies regarding expected bumper production. The price of cotton touched Rs3500 per bale few days earlier against the previous record of Rs2600 making textile business costly for the industrial community.

All estimates of cotton production of 11.50 million bales pronounced by the ministries of Agriculture, Commerce and Finance have dashed to the ground and revised estimates of production are suggesting output of 9 to 9.5 million bales. However, alarmists are even expecting a production of not more than 8.5 million bales keeping in view arrivals of phutti in the ginning mills.

The price of putti (raw cotton) has surpassed Rs1500 per 40 kilogram as against the previous record of Rs1200 per 40 kilogram. Foreign press is also reporting shortfall in Chinese and Indian crop and these reports may further fuel bullish sentiments prevailing in the cotton market. There is no doubt that the cotton bollworm heavily damaged the per acre yield of cotton but this was not the sole factor. What are the reasons that forced Pakistan, once the world's second largest exporter of cotton, to depend upon imported cotton as the production of cotton is continuously declining over the past few years? The production of cotton has been continuously declining since the year 1999-2000 due to various reasons.

The following table confirms that in the year 1999-2000 the cotton production was recorded at 11.24 million bales which declined to 10.73 million in 2000-01, it further dipped to 10.61 million bales in the fiscal year 2001-02 and the downslide continued till 2002-03 reaching 9.7 million bales against the projected production of 10.211 million bales.

COTTON AREA UNDER CULTIVATION, PRODUCTION AND YIELD

Year Area Production Yield

Hectare million bales Kgs/Hec

1999-00 2983 11.24 641

2000-01 2927 10.732 623

2001-02 3116 10.613 579

2002-3(pro) 2796 10.211(9.7) 621

Source: MINFAL/Federal Bureau of Statistics

(The realised production remained 9.7 million bales against estimated 10.211 million bales for the year 2002-3.)

Not all the times were the natural factors such as drought, heavy rains, floods and pest attacks were the sole factors in the decline of the cotton production. It was also the policy of the government to press down the production and discourage growers to toil for the most delicate and costly crop sown in the country. Now Pakistan has emerged as the third largest cotton milling country after China and India and surpassed USA. Had the policy makers devised a long-term plan for the growth of cotton and textile sector the country could have been amongst world's top exporters of garments.

Last year Pakistan imported 1.3 million bales to meet the gap between production and consumption. Pakistan mostly imported cotton from USA, Central Asian Republics and Syria. Now events are suggesting that Pakistan will again have to import cotton to meet the gap between local production and consumption and huge amount of foreign exchange will be spent on the import of cotton. The government has its production estimates from 9.5 million bales to 10 million bales and the country's demand stand at 13 million bales.

According to the estimates Pakistan may be forced to import around 3 million bales to meet the domestic requirements. It is the responsibility of the government to delve into the factors responsible for the failure of cotton crop, the lifeline of Pakistan's economy. Factually speaking pest attack may not be the prime cause of cotton crisis but just one of the reasons. A huge number of cotton growers is already out of business due to day by day rising cost of production resulting from uncontrolled rise in prices of diesel, fertilisers and pesticides whereas price of seed cotton (phutti) remained stagnant for the past five years or so.

Diesel is consumed as number one source of energy in cultivation, sowing, irrigation, and harrowing and spraying process. Imposition of General Sales Tax on fertilisers has inflated prices occasionally. The same is the case with the prices of pesticides and insecticides. Resultantly, majority of the growers lost their enthusiasm for growing cotton. Only those agriculturists are carrying on cotton sowing business who have no option for the kharif season. That is why the production of cotton has remained stagnant since 2000.

The issue of adulteration in pesticides is not a new one. It has been raised at every forum and projected widely in different media. During the past two years the government has been claiming that adulterators will be punished with severely. But so far, things have almost remained unchanged. In the previous season the market was flooded with adulterated and spurious pesticides. Some investors also imported pesticides of the better quality, in bulk but could only sell on credit. But the crop could not bring about good results and a huge amount of the pesticides was dumped and the majority of growers could not return the money for the rest of the year due to unbearable losses from the cotton crop.

The cotton season 2003 came without proper incentives and relief from the federal government in the shape of lower prices of diesel, agriculture tax, duty waiver on fertilisers and proper support price for the seed cotton, keeping in view the rising costs of production.

As a result cotton sowing remained much lower than estimated by the provincial and federal ministries of Food and Agriculture. "Spurious pesticides" was the other factor behind the failure of the cotton crop. Shortfall of cotton on international arena served as lottery to the successful growers who have been witnessing bad days for several years in the shape of less production and price much below than promised prices. Escalating prices of cotton in the international market served as ointment to the wounds of growers. Now this year textile industry has been left to bear the whole burden of cotton crisis. The industrialists have no option but to purchase cotton at exorbitant prices locally or from the international market.

Some policy makers have suggested relying on imported raw-material in case of shortage in local production. But Pakistan's balance of payment position does not permit to import raw-material and process it in an environment where cost of production is much higher than neighbouring countries like India and China. The cost of energy and bureaucratic bottlenecks is much more in Pakistan than its neighbouring states.

The policy makers, especially from the Ministries of Food and Agriculture and Commerce and Finance must closely observe the real factors behind cotton crisis. They should admit that cotton is the most important crop for Pakistan as it runs the wheel of the economy of the country. They should prepare a long-term policy to enhance cotton production by almost 50 per cent which would help boost export of cotton, textiles and garments in the international market. Pakistan has the capability to be amongst world top exporters of clothing.

This only requires a cap on prices of inputs such as diesel oil, fertilisers, pesticides, electricity and agriculture machinery. Agriculture tax should be waived in case of failure of crop. Strict punishment must be awarded to the adulterators of spurious pesticides. Moreover mark-up on agriculture loans should be reduced to single digit in case of Zarai Taraqiati Bank, which now is charging 13 per cent mark-up for those customers who pay back in time. While those tillers who miss the concessionary rate facility have to pay 16 per cent mark-up which is beyond expectation of any bank either in the private or government sector.

It's is the duty of the government to protect the interests of industrial as well as agriculture sectors along with the common man. Ensuring proper price and marketing of the produce of the growers is also the duty of the government if the country has to witness economic growth in years to come.