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Pakistan : Cotton growers benefit from open trade policy (January 13, 11)

Pakistan : Cotton growers benefit from open trade policy

Pakistani cotton growers have benefitted from the open trade policy of the government that enabled them to obtain import parity price from the industry by earning additional Rs150 billion, as compared to the last year, while Indian farmers suffered due to restrictions on cotton export, analysts said on Wednesday.

Pakistan Cotton Forum Chairman Seth Muhammad Akber commended the government on pursuing the free market policy, despite the fact that the country produces three million bales less than industries annual demand of over 15 million bales.

He said because of this policy the industry cannot exploit the farmers.

All Pakistan Textile Mills Association (APTMA) Chairman Gohar Ejaz said that spinners wholeheartedly favour free trade of cotton.

“This year, we offered farmers the rate that kept the exporters at bay.”

Only four percent cotton out of over 11 million bales production could be exported this year, he said, adding that APTMA did not ask for any restrictions on cotton trade even when the government imposed restrictions on yarn exports.

As a result, he said, farmers who lost around two million bales due to floods still earned over Rs150 billion more on cotton crop than last year.

Gohar said that APTMA wants to facilitate the cotton farmers, despite suggestion by the industry that cotton cess should be increased from Rs20 per maund to Rs50 per maund.

APTMA members have proposed the increase on the condition that Rs400 million thus generated would be exclusively used on cotton research.

Farmers Associates of Pakistan Director Hamid Malhi said that there is a need to adopt similar policies that protect farmers that are weak stakeholders.

He said other industries should follow the example set by the spinning industry.

A leading spinner S M Tanveer said that India has a huge surplus production of cotton this year.

“They produced around eight million bales more than their consumption last year,” he said.

Despite huge global demand, only three million bales could be exported due to various hurdles created by the Indian authorities, he said.

Unlike Pakistani industry, the Indian spinners strongly opposed the export of even surplus cotton to bring down the domestic cotton rates, said Tanveer.

“The Indian farmers would get Rs400 billion less than the global rate of their crop due to restrictive policies of their government,” he added.

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