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| September 24, 2003 | Wednesday | Rajab 26, 1424 |
Growers want standards, millers don’t
MULTAN, Sept 23: Almost a year has passed since the promulgation of much-awaited Cotton Standardization Ordinance 2002, but the federal Ministry of Food, Agriculture and Livestock has not been able to enforce it in letter and spirit.
Regarded a radical decision of the government to improve the state of affairs in the cotton sector, the ordinance promulgated on Oct 4, 2002, to establish the Pakistan Cotton Standards Institute (PCSI) and control the quality of cotton is yet to be implemented.
The functions of PCSI envisaged in the ordinance include standardizing cotton, recommending measures to provincial governments for production of contamination-free cotton, devising quality control measures for the export and domestic use of cotton and handling procedures for contamination-free cotton at the ginning level, grading cotton seed, classifying lint cotton and conducting classes for growers, ginners, spinners, exporters and other people in public and private sectors to prepare them for cotton-grading and classification, developing arbitration procedures for settling disputes regarding classification and grading among sellers and buyers of seed and lint cotton, keeping a liaison with national and international cotton-related institutions and placing officers in ginning factories for supervising the standardization of cotton.
Furthermore, the institute was empowered to charge a standardization fee fixed by the federal government from time to time through official notification. The establishment of a PCSI fund was also laid down in the ordinance to meet operational expenses and pay salaries to the PCSI staff.
Despite its good quality, Pakistani cotton gets low price in the international market due to what experts called improper marketing and absence of quality control measures. Besides, lack of a pricing system based on premium and discount also depreciates the value of raw cotton and subsequent value-added products.
To remove these flaws from the cotton market, Pakistan sought the assistance of UNDP and FAO in 1983 to introduce a cotton standardization system in the country. The pilot project took three years to produce results in the area covered by it. Convinced by the project’s achievements, the country again approached the UNDP and FAO to expand the standardization system to the entire country. The help of Asian development bank was also sought.
Consequently, the PCSI came into being in 1988 to carry on the task of cotton standardization in the country in accordance with international standards. The ADB advanced a loan of Rs96.4m to the PCSI while the UNDP issued a grant of Rs54.57m. The share of Government of Pakistan was a mere Rs1.73m.
However, in the following 14 years, cotton standardization could not be institutionalized due to some vested interests who were making exorbitant profits owing to flaws in the cotton market. The PCSI could work on a limited scale in the cotton belt of the country, only in Multan and Sukkur.
The cotton standarization ordinance has been largely welcomed in the cotton sector because Pakistani cotton is currently placed in Index B in the international market and thus gets three to four cents less than the prevailing price of good cotton per pound.
But, implementation on the ordinance soon went to the bureaucratic cold storage of the federal government. The first meeting of the PCSI board of directors was held in Nov 2002, which deliberated on the cotton standardization fee and a phased programme for strengthening the PCSI and laying down cotton standardization and PCSI service rules.
An executive committee of the PCSI was also constituted at that meeting. The Trading Corporation of Pakistan chairman was made chairman of the committee. Two members were taken from the public sector and one from the private sector. Interestingly, the chairman of All-Pakistan Textile Mills Association was given membership of the committee as a representative of the private sector while growers and ginners were ignored despite the fact that they would matter more in the standardization of cotton.
The executive committee held four meetings before the second meeting of the PCSI Board of Directors on May 12. It was assumed at the first meeting of PCSI directors that as much as Rs100m would be earned on account of the cotton standardizaion fee while the federal government assured of a grant of Rs20m to the PCSI.
To the surprise of all stakeholders, the pundits at PCSI presented a deficit fiscal statement of the proposed structure and operation of the institute. According to them, the institute would need an annual budget of Rs130m as against the expected resources of Rs120m.
However, the Board of Directors chairman, Minfal secretary Salik Nazir Ahmed, observed at the second board meeting that the proposed structure of PCSI was too big to support. Besides, the regulatory role of cotton standarization would not be in line with the government policy of deregulation and market economy.
Earlier, APTMA representative Nadeem Maqbool had refused to accept the PCSI quality certificate as binding on his organization while the chairman of Pakistan cotton ginners association indicated that they were ready to implement the cotton-grading and classification system at the ginning stage provided that APTMA accepted the PCSI certificate. Only the growers’ representatives supported the venture so that they could get a premium on their quality product, which they were being denied by manipulators of the market.
The second meeting of the Board of Directors constituted another special sub-committee headed by agriculture development commissioner Dr Muhammad Hanif of the Minfal to finalize the recommendations within 21 days so that implementation of the ordinance could be started as early as possible.
Four and a half months have passed since the constitution of special sub-committee, but it has yet to submit its report.
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