The monthly report of the International Cotton Advisory Committee has pointed out a 6pc loss in cotton consumption because of persistent energy crisis in Pakistan, while persistent low cotton prices are forcing farmers to shift to other competing crops with better returns.

Coupled with this cotton crisis is the problematic rice surplus, particularly of basmati, and the agri business picture worsens for everyone — from farmers to traders to industry.

What makes the situation even more frustrating is the government’s failure to tackle the long-standing, underlying and aggravating problems of cotton growers. Instead, when the cotton rates fell much below the cost of production, the government, asked the Trading Corporation of Pakistan (TCP) to lift 1m bales off the market and help stabilise the falling prices.

The procurement is currently stuck at 390,000 bales and markets rates have not improved. The TCP has stopped receiving samples for procurement.

For the rice crisis, the government announced a compensation plan for the basmati farmers, modalities of which were to be decided later on. Its revenue department has no data about who sows basmati and who does not. Without such precise data, how would it dole out compensation — cash or kind? No one really knows; at least in Punjab, where basmati is sown. Thus, neither the nature of subsidy is decided yet nor the list of recipients has yet been finalised.

What makes the situation more frustrating is the government’s failure to tackle the long standing, underlying and aggravating problems of cotton growers

One needs to imagine that had the electricity problem not dented consumption by 6pc, the total increase could have been close to 10pc and disposal of cotton much quicker and consistent, improving domestic rates.The ministry of commerce still hopes that the consumption would increase by 2pc to hit a figure of 2.3m bales.

Similarly, had the government institutions planned better for rice and arrested the declining trend, it would not have needed to come up with any subsidy plan.

The cotton price for farmers has been a persistent problem, which the government had ignored for long. The farmers responded by decreasing acreage under the crop.

For the last few years, the area under crop has dropped by almost 1m acres. With the power crisis deepening each year, the industry is unable, or unwilling, to buy crop produced even from that reduced area. It is the industry’s crisis, which has now attracted official attention, not the farmers’ plight. Though both are interlinked, the government prefers industry.

Even now, the government is concentrating on one-off solutions; subsidy for basmati farmers and inducting TCP for cotton growers. Instead, it should focus on business cycles.

The textile industry needs power at affordable rates. There is no way the government cannot provide it, even during these crises. With the entire industry needing around 3,000MW — out of total demand of 24,000MW — and some solution has to be found with better management.

For basmati, the government has the option of concentrating on the Gulf, Middle Eastern and neighbouring states, where basmati rice is in huge demand. The European Union pays premier price for it. The only thing both these commodities need is better domestic planning — on sustained and efficient level.

Published in Dawn, Economic & Business, December 8th , 2014