Cotton, long hailed as Pakistan's "white gold," is witnessing a sharp decline in cultivation, particularly in Punjab, which produces the vast majority of the country's cotton. This trend threatens the foundation of Pakistan's export economy and industrial competitiveness. If the current trajectory continues, Pakistan will need to import more cotton and edible oil while its textile industry loses ground in global markets.
Punjab Cultivation Falls Short
Punjab managed to cultivate only 2.614 million acres of cotton against a target of 3.2 million acres, an 18% shortfall. This represents a drop of over half a million acres compared to the previous year. Several factors have converged to produce this outcome.
Erratic Weather and Rising Costs
Erratic weather has discouraged growers who are already battling rising production costs and declining profitability. Additionally, the expansion of sugar mills around Rahim Yar Khan and adjoining areas has incentivized farmers to switch from cotton to sugarcane, a crop offering more assured returns.
According to industry experts, farmers cannot be faulted for making economic decisions that maximize their incomes. The failure lies with policymakers who have been unable to make cotton cultivation commercially attractive despite repeatedly acknowledging its strategic importance.
Budget Impact and Policy Uncertainty
The recent federal budget has done little to inspire confidence. Cotton and phutti prices came under immediate pressure following the budget announcement, while the proposed 18% sales tax on cottonseed and oilcake further unsettled the market. Although there are indications that the tax may eventually be withdrawn following recommendations from the Senate and representations by industry stakeholders, policy uncertainty itself discourages investment.
Strategic Implications
Cotton links the farmer to the factory, the village to the export market, and agriculture to industrial growth. Allowing this chain to weaken would amount to voluntarily surrendering one of Pakistan's greatest economic strengths. The textile industry, a major contributor to exports, relies heavily on domestic cotton supply. Continued decline could lead to increased imports and reduced competitiveness.
