No sector of Pakistan's economy possibly so strikingly underscores its enduring weakness as the chronically ailing cotton sector which has been failed- both by the government and the private sector.
That this should happen in a primarily agricultural country with cotton as the backbone of the economy, and when over 50 per cent of the people depending on agriculture, is astounding.
And that is all the more so when cotton is the top cash crop of the country and the textile industry is the principal industrial sector getting 66 per cent of the export earnings of the country.
Not only has there been a sustained quantitative degeneration of the crop after the production had peaked to almost 13 million bales in 1991-92 but also the qualitative deterioration has not been arrested and reversed to our lasting sorrow.
In fact what had been achieved in this area through the rigorous efforts of the former commerce minister Razzak Dawood and food and agriculture minister Khair Mohammad Junejo working together, has been thrown to the winds and the Cotton Standardization Ordinance (CSO) of 2002 stands deserted by all the stake-holders after paying lip service to that vital legal measure.
The need of the country is for 15 million bales as suggested by Iqbal Omar, president of the Karachi Cotton Association, particularly in view of the fact that $4 billion are reported to have been invested in the renovation and expansion of the industry to meet the strong challenges of the post-textile quota world from January 1 and the exacting demands of the World Trade Organization.
With only ten months to go for the textile quotas by which Pakistan benefited a good deal to expire, only 10 per cent of the textile exporters are ready to face the rabid competition of the post-quota world, says Tariq Ikram, chairman of the Export Promotion Bureau. And that is scary.
With cotton production estimated to be 10 million bales with good luck, Pakistan has to arrange for the import of 2.5 to 3 million bales. Last year the import was 1.3 million bales, Half a million bales for the current season have already arrived from India, and 200,000 more bales out of the total contracts for 700,000 bales are soon to arrive, some of them via Dubai.
When cotton is in short supply and prices soar, as has happened this year, growers and ginners become more indifferent to the quality and grading. As a result Pakistan has usually been getting 10 cents less than New York prices of cotton and this year it is 15 per cent less than the New York price, says Razzak Tabba, major textile-owner and cotton trader.
As a result we export small quantities of cotton at rather low prices and then import better quality cotton from abroad at higher prices. The importers are still happy as they are compensated by the higher quality of cotton they get from outside.
Tabba says he has imported cotton from Sudan, Ethiopia, Yeman Ivory Coast, Mali and Togo. All of them, including the remote developing countries, are following the standardization procedures strictly. Some others have imported cotton from Egypt, Central Asia and the US.
The importers are pleased with the quality of the Indian cotton. The improvement in quality within a short time has been remarkable, they say. A few of them propose to visit India next cotton season to see how India has achieved that.
Mr Mohammad Saeed, who as president of the Pakistan Cotton Ginners Association, played a major role in the formulation of the CSO says that Razzak Dawood and Khair Mohammad Junejo were the moving spirit behind the ordinance as federal ministers and after them none has bothered to take care of the issue. In fact, now not a single bale is pressed according to the standards laid down by the ordinance.
He says the Ginners Association had time and again urged the government to set up ten fibre testing laboratories in the cotton growing areas of Sindh and the Punjab, but the appeals had fallen on deaf ears. So the pest-free cotton and dust-free cotton, which Razzak Dawood, had been talking of has become a distant goal again.
The stakeholders are so divided now that three meetings of the board of directors of the Pakistan Cotton Standards Institute could not reach a consensus on how to implement the CSO.
And some of the new members of the standardization committee are reported to hold that compulsory standardization is against the deregulation policy of the government and the standardization under the new policy should be voluntary.
If left to themselves, the ginners may want no standardization or interpret the ordinance the way they like, according to the supply levels in the market and the ruling prices. That makes one mill-owner say that if the situation does not improve he would prefer to use imported cotton even when the domestic output is available.
In the kind of situation that prevails we need standardization of cotton not only to compete in the global market but even at the South Asian level when the Free Trade Area comes into effect.
As far as the textile mill-owners are concerned they are affected not only by the vagaries of the ginners who bundle up their contaminated cotton but also the ban on hedge-trading which bars them from booking the cotton they need in advance at agreed prices.
Following the demand of the textile exporters the government has set up a committee of all stake-holders to examine the issue and decide on the modalities for resuming hedge trading which had been suspended after the Karachi Cotton Association has made a success of that.
Earlier hedge trading had been banned in the name of Islam, which was utterly unjustified as it is nothing more than advance booking of cotton. The textile exporters who made commitments to export six months to a year before they actually export according to agreed prices in advance need to book their cotton too in advance instead of being surprised at the last moment and put to losses by buying the cotton at high prices prior to the manufacture and export.
Pleading to the federal food and agriculture minister to strive for an output of 15 million bales of cotton from the current 10 million bales the KCA chief asked for increasing the acreage of cotton crop and yield per acre. He also pleaded for improving the quality of the seed through efficient research and drip cultivation to save water.
Since there is pressure on land and demand for land for other crops as well, particularly wheat, the efforts should be to increase the yield per acre, which can be achieved among other steps by using better seeds. But a good deal of new research has to be done and the government has to come up with the funds along with the textile industry, the growers and ginners.
The casual or in different approach to the problem of cotton will not do. Normally the 15 million bales target, which had been set many times earlier, should have been achieved a long time ago, but not enough steps had been taken to protect the crop from the vagaries of the weather and pests and the follies of the more greedy among the ginners.
If it is argued that compulsory standardization is against the de-regulation policy of the government, there has to be free-for-all in all de-regulated sectors and even criminals may not be arrested unless they surrender voluntarily.
Pakistan can neither afford to sell its cotton at 10 cents below New York price for ever nor have a low image for its cotton for ever to enable some unscrupulous elements in the country to exploit shortages and gain far more than they would otherwise which, in fact, they do not because of the admixture of their cotton with trash and other impurities.
And it is no use setting up expensive research institutes if their findings or recommendations are not implemented earnestly and the country enabled to profit by that. A real turnaround has to begin now instead of more of the same, as happens now, continuing chaotically.
