Cotton picking, policy style

EDITORIAL: A 25 percent increase in phutti arrivals should have been welcome news for a cotton economy that has suffered years of decline. The latest Pakistan Cotton Ginners Association (PCGA) report shows arrivals reaching 1. 114 million bales by August 15, despite adverse weather and disruption from the goods and oil transporters’ strike. Yet scratch beneath that encouraging headline and the familiar story quickly returns: conflicting official data, undocumented trade, distorted cropping patterns and policies that continue to undermine one of Pakistan’s most important agricultural value chains. The numbers themselves should worry policymakers. Sindh has recorded a 42 percent increase in arrivals to 734, 000 bales, while Punjab managed only a 3 percent rise to 379, 000. More troubling is the discrepancy between the PCGA figure and Punjab’s Crop Reporting Services estimate, which put provincial production at 585, 000 bales as of August 13. Add the movement of an estimated 60, 000 to 70, 000 bales of cotton and lint from Sindh into Punjab, and even establishing how much cotton Punjab is actually producing becomes difficult. That is hardly the foundation on which serious agricultural policy can be built. Governments cannot manage acreage, production targets, imports or incentives intelligently when basic data from different institutions do not reconcile. Pakistan’s agricultural administration has spent decades producing policies, committees and targets while repeatedly failing at the less glamorous business of implementation, coordination and reliable measurement. Then there is taxation. Industry representatives estimate that around 100, 000 bales have already moved through undocumented channels because of heavy sales taxes on ginning factories, and warn that the figure could reach between 1. 5 million and two million bales this season unless the problem is addressed. If taxation is driving legitimate economic activity underground and ultimately depriving the exchequer of revenue, the policy deserves immediate reconsideration. Persisting with it would amount to taxing the documented sector into informality and then wondering where the tax base went. The more damaging distortion, however, is unfolding in the fields. Rahim Yar Khan, traditionally an important cotton-growing district, has reported arrivals of only 1, 637 bales from two partially functioning factories. Industry experts blame, among other factors, the spread of sugar mills across core cotton areas, where financial incentives have encouraged farmers to switch towards sugarcane. This is where poor agricultural planning collides with Pakistan’s political economy. Sugar has long enjoyed extraordinary influence because of the political weight associated with the industry. But privileging one crop has consequences across the agricultural value chain. Sugarcane competes for land and other resources, while shrinking cotton production creates problems far beyond the farm. Cotton supplies the textile industry, Pakistan’s flagship export sector, so every structural weakness in cotton eventually travels downstream into industrial production, exports and the foreign exchange account. The reported macroeconomic cost is already enormous. Industry experts cited in the report estimate that Pakistan spends between $6 billion and $7 billion annually importing raw cotton and edible oil. For a country perpetually short of foreign exchange, allowing domestic agricultural capacity to deteriorate while precious dollars are spent replacing lost production is difficult to defend. Pakistan once possessed a genuine comparative advantage in cotton. Rebuilding it requires more than celebrating one encouraging fortnight of arrivals. It requires credible data, rational taxation, better seed and crop policy, protection of cotton acreage from politically distorted incentives and, above all, agricultural planning that looks beyond the interests of powerful groups. The latest arrival figures show that cotton can still surprise on the upside. Unfortunately, Pakistan’s management of cotton continues to surprise for all the wrong reasons. Copyright Business Recorder, 2026

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