Pious announcements by the government are not enough; they have to be followed by timely action commensurate with the scale of the problem.
By Kaleem Omar
Pakistanâ€™s history is replete with examples of policies that were announced by the government of the day and then came to naught. This sorry state of affairs has sometimes been witnessed even in the case of policies that were meant to deal with such key economic sectors as textiles, the backbone of the countryâ€™s economy and its biggest export earner.
Back in 2000 then-Commerce Minister Razzak Dawood had announced the â€œTextitle Vision 2005â€ policy. Among other things, the policy focused on measures aimed at making Pakistani cotton contamination free, right from the picking stage to the transportation and ginning stage. The idea was to produce trash-free, premium quality cotton. Not only would this boost cotton exports, so it was argued, it would also help Pakistan to recover some of the export markets it had lost to other cotton-exporting countries.
But what has become of that policy in the seven years since it was announced? Is it still alive and kicking, or has it died a quiet death in some musty corner of Islamabadâ€™s bureaucratic labyrinth â€“ that graveyard of innumerable well-meaning policy initiatives? In other words, has the policy been strangled by red-tape?
Be that as it may, the policy was a good idea and needs to be revived and pursued with full vigour by whichever government comes into office after the forthcoming general election.
The â€œTextile Vision 2005â€ policy proposed monetary incentives to growers in the form of higher prices for contamination free cotton. It also called for growers to be trained in better picking, handling and transportation methods. In this connection, growers would be encouraged to use cotton bags for packing their cotton instead of the jute bags and synthetic bags used at present. They would also be encouraged to use cotton thread instead of jute thread for sewing up the bags.
Growers would be told that picking should be done when the sun was out, at around 10 oâ€™clock in the morning, so that there was no dew on the cotton when it was picked. Presently, growers pack their cotton into empty jute bags, or synthetic bags, in which fertiliser is supplied to them. This practice would be discouraged and growers would be encouraged to use cotton bags instead.
For the scheme to work, however, a mechanism would have to be devised to supply cotton bags to growers at subsidised rates; otherwise they would continue to use jute bags and synthetic bags â€“ the price of which was already included in the price they paid for fertiliser.
Growers would also be told that when cotton was transported from their fields to the ginning factories, it should be transported in open trolleys to allow further drying out to take place. The practice of allowing middlemen to sell cotton from roadside dumps would be discouraged, because cotton lying on the ground by the side of the road tends to get contaminated by roadside trash.
Ginners, too, would be trained in better ginning techniques. Towards that end, the commerce ministry had agreed to handover land owned by the now long defunct Cotton Export Corporation near Multan to the federal ministry of food, agriculture and livestock for setting up a cotton ginning institute, where ginning factory staff would be trained in modern techniques. The commerce ministry had also agreed to provide a substantial amount of seed money for the project from the ministryâ€™s budget.
In another move, the then-commerce minister had told the Pakistan Cotton Ginners Association (PCGA) in 2000 that he was prepared to direct the Trading Corporation of Pakistan to import ginning saws for the PCGA members, in order to help them improve their ginning operations.
To produce good quality ginned cotton, ginning mills should replace their ginning saws ever year at the end of the ginning season. In Pakistan, however, most ginning factories continue to use the same saws year after year, resorting to re-sharpening their old saws rather than importing new ones. The quality of cotton ginned with worn out saws, or re-sharpened saws, can never be as good as that of cotton ginned with new saws.
Despite several written reminders to the PCGA, however, it failed to furnish the commerce ministry with specifications for the saws that the trade body would like TCP to import for the ginning factories.
Pakistani textiles have to compete with many countries for export markets. The competition has become much fiercer since December 31, 2004 when the system of textile import quotas instituted under the old Multi Fibres Agreement ended and was replaced by a quota-free World Trade Organisation regime. That was why the commerce ministry had chosen to name the textile policy â€œTextile Vision 2005.â€
With better than average rainfall in recent years, Pakistanâ€™s cotton output has progressed reasonably satisfactorily in Punjab.
However, the area sown with cotton in Sindh has sometimes fallen short of the target, owing in the main to water shortages in the province.
Even so, the overall outlook for this yearâ€™s crop is favourable and Pakistanâ€™s production is expected to be over 15 million bales. A projected domestic demand of 14 million bales for 2007-08 for local textile mills is expected to leave about million bales available for export and carryover buffer stocks for next year.
However, special efforts will have to be made to secure good export prices for Pakistanâ€™s new cotton crop because the outlook in the international market is still bearish due to expected bumper crops this year in most cotton-growing countries.
In recent weeks, New York futures have fluctuated erratically, reacting mainly to US weather developments. In the United States, the focus of concern remains the rain-grown portion of the Memphis territory crop, which continues to suffer from a lack of moisture. West Texas and the Southeast, however, have received some welcome moisture, and near-optimal conditions continue in the Far West.
The Mexican harvest is expanding into Matamoros and southern Sonora. The cotton crop also continues to progress satisfactorily in Greece. Temperatures have moderated in Turkey. Overall, Turkeyâ€™s crop continues to make satisfactory progress.
Recent heavy rain in India has been followed by a period of dry, sunny conditions in several cotton-producing states, raising expectations of a good harvest. Heavy showers have fallen in the Indian northern zone state of Haryana. The region, which also includes Indian Punjab and Rajasthan, is expected to fully maintain production during the new season at the same level as last year. Overall, the crop is reported in good condition.
By contrast, plantings in the Indian state of Gujarat were delayed and some re-sowing was required. Final sowings also reportedly registered a decline from the acreage sown last year. Similarly, in the main southern zone producing state of Andhra Pradesh, the area planted to cotton has declined this year, as farmers switched to alternate crops, particularly tobacco.
On the export front, the export value of Indian cotton textiles is estimated to have risen over 13 per cent in the first half of the current financial year over the same period last year.
Meanwhile, Chinaâ€™s foreign trade in cotton continues to show a massive surplus of exports over imports.
In recent years, Pakistan has lost some of its export markets to the cotton-growing Central Asian states. Last year, it even imported some cotton from these countries.
Ginning of the Australian crop has drawn to a close. So, Australian cotton is again likely to be first in the export market this year. Remnant picking continues in Argentina. Paraguay still awaits an official announcement of funding arrangements for procurement operations for the 2006-07 crop, while Columbia anticipates a recovery in the area sown to the next coastal crop.
Meanwhile, Pakistani textiles and garments exports â€“ which constitute over 60 per cent of the countryâ€™s total exports â€“ are expected to be about $ 10 billion dollars in the current fiscal year. According to some industry representatives, the figure could be even higher given the greater access to Western markets that Pakistani textile exports now enjoy â€“ at least in theory â€“ under the quota-free WTO regime.
Higher exports, however, will depend on the cost of such key manufacturing inputs as electricity. Pakistanâ€™s electricity tariffs are already the highest in the world. Any further tariff increases mandated by the government could result in our textile goods becoming uncompetitive in foreign markets, leading to reduced market share.
Originally published in The News Business and Finance Review.