LAHORE, Jan 31: A proposal to withdraw general sales tax on the import of man-made fibre (MMF) is under study, says Textile Minister Mushtaq Ali Cheema.

"The move is aimed at enabling local textile industry to produce fabric according to international market demand," he told a general body meeting of the Farmers Associates Pakistan (FAP) here on Monday.

Talking to newsmen later, the minister conceded federal government's failure in ensuring Rs925 per maund cotton price to farmers. He said the government had fixed the price in all sincerity but farmers could not get it due to various market factors.

"Such issues become major crisis in other countries but the government remains silent in Pakistan because it does not have resources to rectify the situation." The minister said the cotton industry's contribution to the national income as a value-added item was only 30 per cent. It could be raised up to 70 per cent with a little more effort.

"The industry, farmers and the government will have to join hands to ensure value addition so that more foreign exchange could be earned." Mr Cheema claimed that the ginning industry in Pakistan consumed 83 per cent of yarn and the rest wasted. It should put in extra effort to reduce that loss as well.

The minister was of the opinion that tariff and anti-dumping duties might be major factors for the governments for saving their industry in a non-quota world. It would take another four to five years before things could be sorted out, he added.

Later, FAP chairman Shah Mahmood Qureshi told reporters that farmers produced more cotton this year but earned less as compared to last year. This was because of wrong government priorities and policies, he added.

Farmers received anything between Rs800 and Rs900 per maund. Now, when cotton has shifted hands and gone in stores of the ginners, the price has gone up to Rs1,100. "Who is pocketing this additional money," asked Mr Qureshi and demanded that the government should launch an inquiry to find out the beneficiaries.

"In this situation, the claim of chairman of the Trading Corporation of Pakistan hardly makes sense when he said the TCP sustained Rs28 billion loss in procurement." Mr Qureshi said the Punjab government has slapped commercial tariff on some canals in the province. "This is cruel to say the least," he concluded.