Top government decision-makers are giving preference to the strong textile sector over cotton growers and ginners, and as a result, growers have reduced their inputs, said Ministry of National Food Security and Research (MNFS&R) Secretary Dr Hashim Popalzai.
He was speaking at a meeting of National Assembly Standing Committee on National Food Security and Research presided over by the Committee Chairman Rao Muhammad Ajmal.
Dr Popalzai told the committee that when the issue of five percent tax on cotton oil seed cake came up, comments were sought from concerned ministries but only the Ministry of Commerce supported the proposal. While the Federal Board of Revenue (FBR) clearly said that it could not support the proposal and it proposed to impose tax on other cakes to eliminate discrimination in the next federal budget, he added.
Dr Poplazai said, “Secretary Finance told the ECC that the withdrawal of 5 percent duty is not possible for the government as the International Monetary Fund (IMF) delegation is due in February 2020. Secretary Finance suggested that I as Secretary National Food Security and Research meet the IMF delegation and try to convince them on withdrawal of this duty”.
The MNFS&R Secretary said, “All Pakistan Textile Mills Association (APTMA) is being extended double benefit. We are unable to understand that when the issue of removal of duty on imported cotton comes under consideration IMF’s restrictions do not halt such a proposal but when the issue of removal of duty on cotton seed oilcake then IMF interferes. This is strange and one wonders how this is happening. None of the ECC members mentioned IMF’s restrictions when the removal of duty on imported cotton came under consideration. We will raise this point in the Federal Cabinet meeting when ECC minutes will be presented for ratification.”
He said due to the current situation, growers had stopped investing in cotton crop. He said that even when there was a shortage of cotton in the country, its prices were declining showing manipulation by APTMA as a single buyer of the crop in the country.
“When there is a need to support cotton, its prices drop and the price gap is widened between the Pakistani and the international market as APTMA is a single buyer influencing the market,” he added.
Dr Popalzai said that his ministry presented the case before the ECC with substantial documentary evidence and justification of problems being faced by the economy, growers and ginners due to the five percent tax.
Chairman Standing Committee stated that cotton in Pakistan was not being taken seriously and conspiracies were hatched against it.
Former Pakistan Ginners Association Chairman Haji Hafeez Anwar told the committee that if five percent duty on cotton import was removed, the price of local cotton would further decline. He said that there was no need to import cotton as 1.5 million bales were still in stock in the country. Cotton would not be more than 5 million to 6 million tons if current mess continued, he claimed.
Cotton Commissioner said that 3.5 million bales of domestic cotton were still in stock even then duty free import of cotton had been allowed. He suggested that duty-free import of cotton should not be allowed as long as domestic cotton was available in the market.