AT this time of the year, Pakistan’s rural heartland begins to throb with frenetic activity. The harvesting of each major crop — especially cotton, wheat, and sugarcane — brings to life the entire countryside.
Overloaded tractor trolleys and trucks, choked rural roads, overworked farm workers, packed diesel pumps and weighing stations, crowded market towns, and chugging factories — the entire landscape is abuzz 24/7.
Of all the major crops, for me there is none quite like cotton. Appropriately dubbed the silver fibre, it quite literally holds Pakistan’s economy together. While on its own, it accounts for roughly two per cent of GDP, second only to wheat among the major crops, its importance can be gauged by mapping its linkages with the rest of the economic sectors.
Textiles, fertiliser, pesticides, chemicals, packaging, printing, freight and transport are all, in one way or the other, connected to cotton. On the ‘output’ side, farmer incomes derived from cotton drive the sales of cars, motorcycles, tractors, mobiles, cement, paints and fast-moving consumer goods, among other industries.
In fact, a simple regression of cotton output and real GDP growth shows that nearly half of the growth in Pakistan’s economy in any one year can be explained by the size of this single crop — prompting the label of a ‘mono-crop’ economy in the past.
It also gave birth to the famous ‘rule of thumb’ estimate in the 1990s (by then deputy chairman Planning Commission Qazi Alimullah, if I remember correctly) that each incremental one million bales of cotton would jack up GDP growth for the year by 0.5 per cent.
Cotton is grown on approximately three million hectares, or 7,413,161 acres, (Pakistan being the fourth largest producer). Approximately 1.6 million farmers grow the crop in Pakistan. There are 1,221 ginning factories, 442 textile spinning units, and an estimated 1,184 units engaged in weaving, finishing and dyeing fabric.
All in all, the cotton-supported textile industry of the country accounts for a significant share of employment. Value addition from cotton amounted to approximately Rs365 billion at market prices in 2011-12, which was approximately 25 per cent of the total from all crops grown in the country.
If textiles is the backbone of Pakistan’s economy, and cotton the backbone of textiles, the nerve centre of the cotton-growing sector has to be none other than the extraordinary female cotton-picker, called ‘chunni’ in the vernacular. At the time of sowing, she is in the fields during the searing heat of May. At the time of harvest, she is again diligently going from bush to bush, often with a little kid or two in tow, plucking the fibre for a pittance. The chunni represents the unacknowledged, but very visible, contribution of women to Pakistan’s economic well-being.
Despite its central importance to the economy, Pakistan’s cotton yield is not very high. Approximately 340kg of cotton is produced for every acre sown, which is significantly lower than in China and India. In the case of India, the introduction of Bt cotton several years ago has led to an exponential growth in the cotton yield and output.
Attempts have been made by Pakistani officials for the past several years to finalise an agreement with Monsanto to introduce Bt cotton. In the interim, many parts of the country, especially in Sindh have begun to use Bt cotton seeds smuggled from India.
Interestingly, the downsides of Bt cotton have ‘allegedly’ come to light in India. According to some Indians I have spoken to, Indian farmers are having to cope with the greater water-intensity of Bt cotton. If true, this could have important ramifications for Pakistani farmers, who are already facing the effects of an intensifying water shortage.
Even the final, monetary ‘yield’ from the crop is low. According to a Ministry of Textiles estimate made a few years ago, for each one million bales of cotton grown, China earns up to four times in export receipts what Pakistan manages. India manages to earn twice as much as Pakistan on this score.
This highlights the fact that Pakistan has failed to extract the same export earnings as its neighbours from cotton, due to its operation in the low-end of the value-addition spectrum. However, overall, textile exports have performed strongly over the past few years, rising to $12.4bn in 2011-12, with significant increases in garments, knitwear, bedwear and home textiles.
For me, there is a personal and very nostalgic association with cotton. Trips that I made several years ago with some of Pakistan’s large spinners to buy cotton are etched in my memory. During one in particular, over two glorious winter days we traversed 700km zigzagging our way from ginner to ginner in Pakistan’s cotton-growing heartland. From Multan, Khanewal, Vehari, Ahmedpur Sharqia to Yazman close to Bahawalpur, we were greeted by the most sumptuous lunches and high teas one can imagine (topped off by halwas made from daal and mooli!).
However, the relative power of the various stakeholders also became clearly visible — the grower usually at the ‘tail end’ of the value chain, at the mercy of the middle-man and the ginner; the spinner, and his agent, exercising significant power especially when there is a bumper crop and the market has turned from a seller’s one to one where the buyer calls the shots.
Bottom of the heap, of course, are those whose toils make it all happen — like the poor chunni.
The writer is a former economic adviser to government, and currently heads a macroeconomic consultancy based in Islamabad.