The federal government’s decision to withdraw customs duty and sales tax of
5% each on the import of cotton in view of the falling domestic output of the
commodity, which underpins the country’s industrial and export
performance, is understandable.
The decision, however, does not address the twin problems responsible for
the drop in cotton production – the decreasing area under cultivation and
the falling yield.
In FY15, the country produced 13.96 million bales of cotton. In FY16,
however, cotton output dropped sharply to 9.91 million bales. The following
two years saw an increase in output to 10.7 million bales and 11.9 million
bales respectively.
In FY19, however, cotton production slipped to 9.9 million bales. Cotton
output for the current financial year is projected at 10.20 million bales
against the target of 15 million bales. Thus, between FY15 and FY19, cotton
output dropped 29%. On average, during FY15-19, annual cotton output of
11.27 million bales was recorded compared with average annual
consumption of 14 million bales.
Cotton output is a function of two variables – the area under cultivation and
the yield. In FY15, cotton was grown over an area of 2.96 million hectares,
which in FY19 decreased nearly 20% to 2.37 million hectares. Cotton’s share
in total crop area came down from 12.72% in FY15 to 10.47% in FY19.
Likewise, FY15 saw cotton yield of 802 kg per hectare, which by FY19 had
fallen 11.8% to 707 kg per hectare. Thus, the two key variables combined to
push down cotton output. In terms of area under cultivation, cotton is
Pakistan’s third largest crop behind wheat and rice. The decrease in the area
under cultivation of cotton, inter alia, signifies that farmers are using their
land to grow another crop.
Source: The Tribune, India Saturday, 04 January 2020