The promulgation of the Cotton Standardization Ordinance (CSO), 2002 by the federal government is one of those policy measures, which should have been taken long ago.
Cotton occupies a very unique and central position in the agriculture-based economy of Pakistan. It is because of this cash crop that the country has become a major player in global cotton and textile industry and trade. Cotton and related goods account for more than half of our exports.
Despite this important role in the national economy, unfortunately, cotton crop could not get the due attention of policy makers so far. Reports in the press have frequently highlighted the problems faced by our exporters of cotton-related products, with their goods not coming up to certain standards in the international markets. According to some estimates, the country has been loosing some 10-15 per cent of true value of its cotton produce.
The major problem facing cotton industry has been the absence of any authentic, recognized and scientifically devised grading and standardisation system. Cotton varieties and weight were considered as a base for the marketing and pricing of cotton. This practice, continuing for a long period, has resulted in the mixture of various grades and staples.
The government of Pakistan, with assistance from the UNDP and the Food and Agriculture Organization (FAO), had started a standardization system back there in 1983-84. Though this system was in place for years, it could not succeed in bringing any notable positive change in the cotton scenario. No doubt that the military regime deserves credit for introducing a comprehensive ordinance for cotton industry.
The CSO approved by the cabinet in its meeting late last month, is believed to help in establishing, promoting and implementing the measures required for quality control on all levels to ensure greater exchange.
It is an ironic fact that despite notable increase in the production of cotton over the years, the quality of cotton has been declining. Certain factors like improper picking methods, adulteration of cotton with water and other materials, mixed grades and seed varieties have all played their part. Coupled with improper packaging, storage and transportation (farm to market) means, the situation has resulted in an estimated loss of $350 million annually for the country.
No doubt that contamination free cotton may fetch a better price from the domestic and international markets, leading to more profits for the farmers and ginners. The new ordinance bars the cultivation of virus prone varieties of cotton. It also completely bans the use of jute bags for the packaging and transportation of raw cotton.
It may be noted that the military government had already initiated a clean cotton campaign. Started last year in districts of Rahim Yar Khan and Ghotki, the scheme has now been extended to two more districts, Bahawalpure and Sanghar. The data collected from these districts shows the phenomenal success of this campaign. The contamination of cotton in these districts has come down to 4-6 grams per bale whereas in some other districts it stands as high as 17 grams per bale.
The government has offered some incentives for farmers producing cleaner cotton. The Trading Corporation of Pakistan (TCP) has been asked to procure clean cotton and give the farmers a premium of Rs150 per maund for the cotton having contamination at 1.5 grams per bale, Rs75 for 2.5 gram per bale and Rs50 for cotton having contamination for 3 grams/bale. In order to continue getting the desired results in this regard, such incentives should be maintained, rather improved with the passage of time.
Farmer alone is not responsible for improving the standards of cotton. Federal minister for commerce, Mr. Abdul Razzaq Dawood, had termed the ginning as the weakest link in the whole cotton industry at many occasions. It is believed that this sector has not been working up to international standards, thanks to outdated technology and old-fashioned machinery.
The government has directed the SMEDA to prepare standards for the ginning factories. An important decision on the part of government in this regard is that no outdated ginning factory would be allowed to operate after August 1, 2004. As the cost of modernization of ginning sector, according to experts, is not very high, the ginning factories should move fast to get themselves modernized and better equipped.
Farmers deserve credit for producing over 10 million bales of cotton in year 2001-02. This speaks of their untiring efforts despite scarcity of irrigation water. The world cotton cultivation area is expected to decline in 2002-03 due to depressed prices in markets. But the world consumption at the same time is expected to go up by around 2 per cent. This would surly improve the cotton prices in the world. The situation provides favourable environment to increase our export earnings, provided we succeed in improving the standards of our cotton produce.
At the same time we must make efforts to increase per acre yield of our cotton by substantial margin. It is one of the lowest in the region, standing at 562 kg per acre. Our neighbour country performs much better in this field.
As cotton is the base of country’s exports, standardisation of this crop has become crucial for realization and increase of export targets. With fast approaching 2005, when the quotas will vanish, we will have to compete and create our credibility in free international markets. The situation calls for more concerted efforts to increase the competitiveness of our cotton and cotton products.