ISLAMABAD: The Adviser for Commerce, Textile, Industries and Production & Investment, Abdul Razzak Dawood has said the imposition of 10 percent sales tax on purchase of domestic raw cotton and 17% tax of yarn has complicated the matters regarding cotton production.
The Speaker National Assembly Asad Qaiser, while taking notice of declining cotton production and land under cotton cultivation stressed that the revival of cotton was indispensable to Pakistan’s economic growth.
In a bid to discuss the framework and incentives for revival of cotton, the Speaker conveyed a meeting with the Adviser to Prime Minister on Finance and Revenue, Dr. Hafeez Sheikh, and Adviser on Commerce, Textile, Industries & Production and Investment, Abdul Razzak Dawood.
He stated that despite the fact that cotton offers comparative advantage to Pakistan, still during the last three decades more than 20% of land under cotton cultivation has declined and output had fallen by similar ratio.
He added that agriculture sector being the major vehicle for investment in rural development and gainful employment form the core of Pakistan’s economy and its turn-around requires sustained endeavors on multiple fronts. . He assured added that the farmers will be provided with protection and incentives along with provision of quality seeds and other inputs to boost productivity.
The meeting held was a continuation of a series of discussions on the issue of minimum support price for cotton and cost of production of cotton. MNA Syed Fakhhar Imam stressed that despite being Pakistan’s largest revenue generating crop with immense potential for comparative advantage, foreign exchange earnings and employment opportunities, cotton in Pakistan was beset by a host of enduring challenges on numerous fronts. He added that given the unabated rise in cost of production and continuous denial of a fair price in line with the international parity price has squeezed the profit margins of the cotton farmers and they have begun to cultivate crops which offer no comparative advantage to Pakistan’s economy.
He highlighted that due to negligence and ineffective policy framework for agricultural uplift, Pakistan has ceded its competitive edge to regional competitors. He added that India has put in place a support mechanism for more than 26 crops while Pakistan has not been able to incentive its central crop. He regretted the fact that ineffective policies have enriched those already rich at the cost to the local farmers and national economy.
