ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy

CONTENTS
INTRODUCTION........................................................................................................................................ 2 COTTON PRODUCTION IN PAKISTAN ................................................................................................... 2 WORLD COTTON OUTLOOK ................................................................................................................ 3 PROBLEMS IN COTTON SECTOR .............................................................................................................. 4 1. FARMERS LEVEL PROBLEMS ........................................................................................................... 4 2. ISSUES AND CONSTRAINTS WITH AGRICULTURE EXTENSION DEPARTMENTS................................ 5 3. AGRICULTURE RESEARCH SECTOR PROBLEMS............................................................................... 5 4. CONTAMINATION IN COTTON .......................................................................................................... 5 5. ABSENCE OF QUALITY BASED MARKETING ................................................................................... 6 6. ISSUES IN COTTON ........................................................................................................................... 6 CONCLUSION ........................................................................................................................................... 8 RECOMMENDATIONS ............................................................................................................................... 7 FARMER LEVEL ................................................................................................................................... 7 AGRICULTURE EXTENSION DEPARTMENT AND RESEARCH SECTOR .................................................. 7 CONTAMINATION IN COTTON ............................................................................................................. 7 QUALITY BASED MARKETING ............................................................................................................ 8 REFERENCES ........................................................................................................................................... 9 BIBLIOGRAPHY ......................................................................................... Error! Bookmark not defined.

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ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy

INTRODUCTION
This report is based on cotton sector in Pakistan to review the major problems and analyze the current production in the Pakistan cotton industry and recommend the possible solutions. The main body of this report will cover the key problems which Pakistan cotton industry faces. This report covered issues; 1) Issues in Cotton 2) Issues in Cotton at Farmer Level Position 3) Issues and Constraints in Cotton with Agricultural Extension Departments 4) Issues in Cotton in Research sector Problem 5) Contamination in Cotton 6) Absence in Quality Based Marketing Cotton is a crop which contributes major part in export and widely used in our textile industry. Cotton sector faces many problems like farmers level, contamination in cotton, problems that this sector faces because of Government and the very major problem is no value addition in this sector.

COTTON PRODUCTION IN PAKISTAN

At the time of freedom, Pakistan has very few natural resources and very low modern industry. At that time the Pakistan is known as agriculture country because the time of freedom most the industries is establish the Indian areas, so that time preference is to develop irrigation system and the climate is suitable for agriculture including cotton. At the passage of time the cotton play an important role in the development of Pakistan. During the year 201112, the crop was cultivated on an area of 2835 thousand hectares, 5.4 percent more than last year (2689 thousand hectares). The production is reported at 13.6 million bales during the period (July-March) 2011-12, higher by 18.6 percent over the last years production which was 11.5 million bales. (Agricultural Statistics of Pakistan). The two provinces out of four, namely Punjab and Sindh provinces are rich in agricultural areas. Approximate 77 percent of all Pakistan cotton is produced from Punjab and the other remaining 23 percent in the other provinces (GOP, Economic Survey 2011-2012). About 7 million people are involved in the production of raw cotton. Cotton is widely cultivated and this involves intensive use of inputs

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ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy like pesticides, chemical fertilizers, and irrigation and fluctuation in the cotton yield affect the economy as a whole.

Area, Production and Yield of Cotton Year

2007-08 2008-09 2009-10 2010-11 2011-12(P)

Ar (000 Hectare) ea

% - 0.7 Change -7.7 10.1 5.4 13 .4

3054 2820 3106 2689 2835

Source: Pakistan Bureau of Statistics P: Provisional (July-March)

Production % 11 - 9.3 Bales) Change 11 1.4 65 12 9.3 81 11 5 91 13 18.6 9 46 11 4 59 0 .3 5 (000

Yie (Kgs/Hec) % 649 ld -8.7 Change 713 9.9 707 -0.8 724 2.4 815 12.6

On a global basis Pakistan is the 4th largest cotton producing country of the world after China, India and USA. Pakistans share of total world cotton production in 2011-12 is 12.70 percent (Cotton Statistical Bulletin, 2011). Pakistan is the 3rd largest consumer with 11.27 percent of the world production, 3rd largest yarn producer with 9 percent, and 2nd largest yarn exporter with 26 percent. (International Cotton Advisory Committee, 2012). Pakistan Place in the World Cotton and Textiles
Perce Ra 4 9 nt nk th 10 3 . rd 9 3 .0 5 2 26 r . 7 3 n d .0 0 14 3 r d . Source: International Cotton Advisory Committee, Washington D.C., USA r d .0 0 Production Consumption Yarn Production Yarn Export Cloth Production Cloth Export
d

WORLD COTTON OUTLOOK

The production and consumption of major cotton growing countries are
Production and Consumption of Major Cotton Growing Countries 20092010-11 E (in Millions of Tons) 2011-12 P

Production
China India USA Pakistan Brazil Uzbekistan Others World Total

10 6.92 5.18 2.65 2.07 1.19 0.85 3.29 22.17 6.40 5.76 3.94 1.91 1.96 0.91 4.22 25.10 7.40 5.69 3.39 2.35 2.00 0.88 5.28 26.96

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ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy

Consumption
China 10.10 India 4.30 Pakistan 2.39 East Asia/Australia 1.86 Europe & Turkey 1.55 Brazil 1.02 USA 0.77 Others 3.36 25.36 World Total Source: Pakistan Central Cotton Committee, M/O Textile Industry E: Estimated, P: Provisional 9.59 4.48 2.20 1.75 1.49 0.96 0.85 3.17 24.49 9.38 4.56 2.33 1.63 1.46 0.90 0.70 3.01 23.96

Cultivated area from 3056000 hectors in 1947 changed to 2,835 thousand hectors in 2012. At the same time the production of cotton increase from 1106000 Bales in 1947, to 13.6 million bales in 2012.

PROBLEMS IN COTTON SECTOR

1. FARMERS LEVEL PROBLEMS
Lack of general knowledge and skills related to the batter cotton production. No proper site specific crop management decision making skills. Mostly our are poor and their position is that they live hand to mouth position and because of lack of capital are unable to buy modern implements, chemical, improved type of seeds. Hence they cannot maintain the international standard. No proper resources and lack of access to quality inputs and knowledge base. The farmers of our country are mostly uneducated and lack of technical skills. A research show which is conducted in the areas of Punjab like Faisalabad, Rahim Yar Khan, Multan and the results show that only the areas of Faisalabad areas people are something batter then the others where 48% are up to Matriculation and in the others areas the results shows people up to Middle. Mostly farmers are stills following old traditional farming. The reason behind is that they understand the scientific modern methods. No awareness and carelessness about storing cotton properly by road side, cotton agents Poverty, illiteracy, health and social problems force farmers to change to inputs (seed, fertilizer and insect killer) on loan. This condition results in use of sub-standard seed, unsuitable use of fertilizers, sub-standard or in proper insect killer, thus the farmers have to pay extra cost for it and in the result low yields. Therefore, the poor farmer is free in a vicious circle of exploitation and poverty.
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ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy Agriculture Extension Staff due to their financial, administrative and social limitations are bound to limit their activities up to progressive growers who are easily reachable. Therefore, the small scale farmers living in far-off central areas do not get suitable agricultural extension services.

2. ISSUES AND CONSTRAINTS WITH AGRICULTURE EXTENSION DEPARTMENTS

Agriculture Extension Department has a large taskforce of field staff, but they are generally, Diploma holders and do not have suitable technical scientific knowledge to satisfy farmers whereas, in developed world, the extension workers are highly educated (PhD degree holders) and possess problem oriented training. Due to ban on regular appointments of Inspectors and extension staff, a lot of positions are lying vacant in the Agriculture Research and Agricultural Extension Departments. Short-term appointments on contract basis have caused lack of interest in work. Low salary, slow transporter growth and insufficient facilities caused in lack of attention in job responsibilities and establishment of private businesses of insect killer, seed and fertilizers. This situation also promotes operation of sub-standard and out dated plant material and agro-chemicals.

3. AGRICULTURE RESEARCH SECTOR PROBLEMS

Shortage of highly trained manpower in the field of Agriculture Research, Agricultural Education, mostly higher education needs to be supported to provide trained motivated manpower to Agriculture Research Sector. Establishment of research capabilities through foreign trainings and establishment of proper research laboratories are insufficient being one of the major causes of slow development compared with fast advancing world. Training of manpower and establishment of laboratories in the field of Genetic Engineering, Molecular Genetics, DNA foot printing, Biotechnology, NMR and HVI technology need to be managed on urgency bases. Temporary contract appointments have affected brain drain and loss of interest in work.

4. CONTAMINATION IN COTTON
Contamination of cotton takes place at the time of picking, transportation, distributors stores, and cotton sellers and finally at ginning factory level. This problem needs to be tackled on importance basis by provision of proper guidelines to farmers by Agriculture Extension Department and make sure them price incentives.
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ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy There is no proper storage facility available to store the cotton, and contamination is mostly come from external objects such as leather nibbles, leaves, plastic particles, jute, dew and water. After that when cotton goes for whole seller at there the cotton is in open air and in sun for 4 to 5 days this is also affect the quality of cotton. Dews also affect the quality of cotton, its color quality and finishing characteristics. Promotion of cotton ratings and standards as per recommendations of PCSI specification. Promotion of quality based cotton marketing system, all over the country.

5. ABSENCE OF QUALITY BASED MARKETING

Lack of market infra-structure and proper ware houses, sheds for storage cotton bales to protect them from climate. Deficiency of Quality based marketing system is main problem. Deficiency of assured premium for better grade/staple and impurity free cotton. Extreme decline in cotton prices in the better production years takes place to the disadvantage of grower. No proper mechanism of price risk coverage exists.

6. ISSUES IN COTTON
After the nationalization of industry by the Government of Pakistan Peoples Party, Cotton Export Corporation (CEC) was established and the free market operations came to a stop. The function of CEC was at two points; 1) purchasing of cotton from the farmers and 2) export to international markets at government planned prices. In 1970s to deliver low cost inputs to national spinning industry, an export tax of 30 to 35 percent was compulsory. Resultantly, quality of ginned cotton suffered and farmers did not get the payable prices. After denationalization, Minimum Export Price (MEP) was introduced on the exports to checked the under billing. For the time being, Karachi Cotton Exchange (KCA) started buying directly from the ginners. The actions became bureaucratic, and mismanagements took its roots. In the end the farmer suffered and the local market went into isolation. The favorable policies made local industry ineffective. The imbalances in the supply and demand situation came up and forced the dealer to carry over the stock. In 1993-94, the country imported cotton as production fell due to curl leaf cotton virus, (Salam, 2007).

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ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy

RECOMMENDATIONS
1. FARMER LEVEL
Cotton production policy should ensure supply of quality cotton seeds to farmers, and also banned mixture and unapproved seeds. Private companies should follow the laws and provide batter or quality cotton seed to farmers. The government department builds a setup to overlook these companies activities and proper check and balance. Government should arrange the training program for farmers to enhance their skills for batter or quality production. This will be applying on small or village level. For credit facility the government should extended existing credit facilities to large scale to our farmers. We also see India as examples where they provide all the facilities free of cost. 2. AGRICULTURE EXTENSION DEPARTMENT AND RESEARCH SECTOR Check and balance is very important for batter quality, the Agricultural Staff is restrict their activities due to lack of funding. So, government should facilitate them. Agriculture Research Sector should focus on field research for they need to be hired highly educated or experienced employees which work, research or arrange training program for farmers. For this Agriculture Research Sectors should hired experienced or educated not contract basis but on permanent basis and establish proper laborites for their practice. Control of cotton leaf virus through crop management practices. Developed new improved high yield, high fiber quality characteristics and introduce long or extra-long cotton verities

3. CONTAMINATION IN COTTON
Government should provide proper storage facilities to make cotton contamination free which increase productivity. For this Pakistan learn from India and which made significant improvement in quality and also quantity of cotton. In 2000 the India was producing 14 million bale of cotton fiber and which is highly contamination but with the passage of time in 2003 the India produce 40 million bale per year and reduce the contamination in cotton about 40% to 50%. Moreover, the institutional linkage, subsidies and minimum prices from Government also helpful for improving the performance of cotton.

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ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy Institutional linkage also plays a very vital role in the development of technology and productivity. The continuous support from Indian government, research institutions like CIRCOT, cotton association of India and mostly prominently Bajaj have been proved as driving force and play an important role and make possible to give premium prices, as there is less contamination, high length fiber and preservation of natural characteristics of cotton. Pakistan also implements the same strategies which India implements. In Pakistan there is also a lot of private and government research center like PCSIR and the other well know private companies like Ali Akbar Group, Fauji Fertilizer Company Limited which work on large scale and working for the development for agriculture sector and these companies are joint venture with the international companies. These private companies having latest technology and modern laborites. The government collaborates with the private companies; this will be very beneficial for agricultural sector. When government and privates companies and research centers works together the there is more value additional and very helpful for this sector.

4. QUALITY BASED MARKETING

To improve Quality Based Marketing process that they guide the farmer they build proper ware houses, sheds that they store cotton in proper way or also tells farmers how they get contamination free cotton. Give information to farmer on time and tell them the farmers to the prices of cotton which government decide and also check and balance on it. Provide information to farmers about new technologies and new innovation in agriculture sector.

CONCLUSION
Cotton is main agriculture product in the Pakistan and its serves both cash crop and cheap raw material for industry. Cotton is very important component of our export industry. But over the time the combination of policies shifts have caused both cotton production and exports to fluctuate. In the light of above, we conclude that the cotton production in Pakistan is much higher than the present production; the cotton environment has been degraded at the passage of time, trade policies is also effect this sector, and all of this happen due to lack of institutional awareness. In this country over 14 research institutions are work at federal and provisional level but there is lack of co-ordination among them. So there is need to restructure their institutions and also enhance the co-ordination at institutional and government level. In addition this sector needs
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ISSUES IN PAKISTAN COTTON INDUSTRY Pak Economy

to better management practices to improve efficiency of resource and improve the quality of raw cotton and value-added products. Pakistani government will have introduced sustainable cotton production policies and practices for long term basis.

REFERENCES
http://www.finance.gov.pk/ http://www.pbs.gov.pk/content/agricultural-statistics-pakistan-2010-11 http://www.pbs.gov.pk/ http://icac.org/ http://www.pccc.gov.pk/ http://www.pakjas.com.pk

Government of Pakistan (2011-12), Highlights Pakistan economy survey 2011-2012, Economic Advisers Wing, Finance Division, Islambad. Raana Ahsan, PhD. Thesis, June 2008, International Trade Challenges and Opportunities for Pakistan Cotton-Textile and Apparel Sector, National University of Modern Languages Islamabad. Tarfia Thair, S. Mushtaq, S.A. Rana, and M.A. Sheikh (2012), Farmers Awareness about Spider as Natural Predator of Cotton Pests and Hazardous Effects of Pesticides on their Health from Three Districts of Punjab Cotton Belt: Past Findings and Future Priorities. University of Agriculture, Faisalabad, Pakistan. (Pak J. Agri. Sci., Vol. 49(3), 381-386;2012) Dr. Akmal Hussain (April 2005), Agriculture Growth and Poverty Reduction: A Policy Perspective., paper presented at the International Seminar on Management of the Economy 28-30th April 2005. Lahore School of Economics. Pakistan

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