Daily Times

Our government’s response to the fast-deepening cotton crisis has been woefully inadequate, resting instead on a misguided sense of pride regarding past bumper crops. This approach has overlooked a crucial opportunity to direct benefits toward the average farmer, whose growing disillusionment has contributed to a dramatic 33 per cent decline in cotton production. Tax-free cotton imports have further complicated matters, leading to ginning factories overflowing with unsold produce while both traders and farmers are burdened with record-high raw cotton inventories.

Consequently, the local cotton industry, essential for the livelihoods of millions and a backbone of our textile sector, is suffocating, making it imperative, now more than ever, for the government to adopt reforms that protect this vital sector. Compounded by insufficient rainfall and rising temperatures, cotton yields have significantly declined. Projections indicate a further decrease, thereby intensifying our reliance on imports and leaving domestic producers increasingly vulnerable.

Smallholder farmers are particularly hard-hit, as many struggle to survive amid debilitating financial strains. The textile sector, too, is suffering immensely, with exporters grappling with stiff competition, exacerbated by an 18 per cent sales tax on local supplies intended for export manufacturing.

Adding to the urgency, the impending review of Pakistan’s GSP status poses a significant threat. With over half of Pakistan’s exports directed to the EU, any revocation of these protective measures could have catastrophic implications for the local textile industry. Given these circumstances, traders are increasingly advocating for a pro-business framework that ensures a level playing field compared to regional competitors. They call for alignments in energy costs, simplified taxation policies, zero sales tax on input materials, and supportive export-related services. The government must go beyond mere rhetoric and establish strong agricultural support programs that provide cotton farmers with the resources they need to adapt to climate change and variable weather conditions.

Eliminating the sales tax burden on the cotton sector is also critical. The current fiscal regime imposes undue strain on producers, eroding their profit margins and deterring investment in sustainable agricultural practices. Addressing these fiscal disincentives will not only enhance local production capabilities but also improve competitiveness against cheaper imported cotton.

It is high time our policymakers embed climate resilience measures into agricultural policy initiatives. Solutions that address the challenges posed by climate change will be crucial if the government intends to secure the long-term viability of Pakistan’s cotton industry. Ignoring this wake-up call could lead to dire consequences for the already troubled cotton sector. *