Cotton popularly known as Silver Fibre had a very significant position in the economy of the country on the birth of Pakistan.

It prominently sustained the uprooted economy of the country in the wake of mass exodus of non-Muslim businessmen controlling the cotton trade both at home and abroad.

The cotton grown in Pak - Punjab and Sindh excels that produced elsewhere in the Sub-Continent both qualitatively and quantitatively. That was why in our part of the Sub-Continent a number of British-owned cotton companies including two giant ones viz Volkert and Rallies had widely laid down a network of their business activities upto the grass-root level. They (both Volkert and Rallies) had made their own arrangements (distinct from government) for estimating the size of the cotton crop each year. As opposed to official estimate they used to be more realistic and close to the actual production.

At that time because of non-existence of any textile industry in the country, almost the entire cotton production used to be exported abroad particularly to United Kingdom for feeding her well-established textile industry. With very little government intervention the private sector exporters were free to manage their business both within and outside the country. Volkerts and Rallies used to be the top exporters except in some years of 1954 when a Pakistani private limited company of which the writer of this article was the General Manager with a small team of workers by -passed the two British giants as top exporters.

With such a grand performance of cotton trade in the good old days, it is lamenting that one cotton industry as a whole is in doldrums because of government ill-thought and unstable policies.

Present Position

Despite experiencing some bad years due to uncontrollable leaf curl menace, the country still produces appreciable quantity of cotton ranking as the fifth largest cotton producer in the world. After attaining a record level of 12.8 thousand bales in 1991-92, its production dropped by 27 percent 9.3 thousand bales in 1992-93 because of leaf curl virus. Also, thereafter production continued to fluctuate between 8 and 8 million bales except in 1995-96 when it rose to 11 million bales. During the last three years (1996-97 to 1998-99) production of cotton moved in narrow have of 8.7 and 9.4 thousand bales. However, subsequently it picked up considerably to 11, 240 thousand bales.

Strangely enough, in view of the instability in cotton production instead of imposing ban on the export of raw cotton for enhancing the availabilities to the growing cotton textile industry, the government allowed the textile mills to import cotton from abroad.

In a bid to discourage the import Economic Coordination Committee of the Cabinet (ECC) has imposed a 15 percent excise duty on the import of cotton. This measure would hardly serve the purpose because of the recession in the international cotton prices. As a result domestic prices are bound to recede to the determent of our growers.

In order toe avert this ugly situation, recently Trading Corporation of Pakistan (TCP) has been provided Rs11 million for purchasing raw cotton from the growers at the government determine prices so as to stabilise the open market cotton prices. It is fears that T.C.P may not be able to deliver goods but would lose money by exporting its purchase at comparatively lower prices to overseas markets in view of recession in the world cotton prices.

Thus, now cotton has become a highly problematic crop for the country. Various contemplated and decided measures to help cotton growers may, it is feared, would go against the national interest. To be specific, providing as large a sum of Rs 11 millions to TCP for purchase of raw cotton is likely to put a great pressure on the banking sector. That may ultimately cause increase in the bank interest rates adversely affecting the bank accounts holders in general.

As the ginners have already declined to purchase phutti at government fixed support prices, they may have to close down the factors. In this situation where from TCP make the planned purchase of raw cotton. This may cause a cotton crisis of the nature not ever witnessed before.

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