“REDUCTION IN COTTON PRODUCTION AREA

IS GOOD FOR PAKISTAN’S ECONOMY”

By

MUHAMMAD SHAHID SALEEM

DEPUTY SECRETARY
GOVERNOR’S SECRETARIAT, PUNJAB
LAHORE

19TH PUBLIC POLICY AND GOVERNANCE

(PPG) COURSE

AT

PUNJAB INSTITUTE OF MANAGEMENTAND

PROFESSIONAL DEVELOPMENT (PIMPD)
MPDD, LAHORE
 PREFACE

Cotton is an important cash crop of Pakistan and lifeline of Pakistan’s textile industry. It
accounts for 40 % of the industrial labour force and employs about 10 million people. It
contributes 0.8 percent in GDP and 4.5 percent in agriculture value addition. However, over the
years cotton production area is reduced significantly and replaced by some other crops especially
sugarcane and maize resulting in reduced cotton production.

I would like to express my gratitude to Instructor (HR) Ms. Afshan Mushtaq for
providing guidance to me to undertake this research work. She always encouraged me to take a
broader view of the topic. She deliberately avoided imposing her own views about the topic and
her such attitude helped me to complete the paper by taking into account multiple factors rather
sticking to some pre conceived notions. I would also like to thank authors of various books and
research articles as well as Dr. Khawar Jawad, Director, Entomological Research Institute, Ayub
Agricultural Research Institute (AARI), Faisalabad for sharing data on cotton issue. I would also
take this opportunity to thank Mr. Muhammad Younas Dhillon, Country Lead, Bayer Crop
Sciences, Pakistan, for his valuable input during the discourse of this study.

i
 EXECUTIVE SUMMARY

Agriculture contributes about 18.5 in Pakistan’s GDP. Cotton crop is major cash crop
of Pakistan which contributes about 0.8 percent in GDP and 5.2 percent in value addition. Cotton
provides raw material to the textile sector, which is the largest industrial sector in Pakistan and
accounts for about 40 % of the industrial labour force and about employs 10 million people.
Cotton is the second most occupy cultivated area after wheat crop and grown on 15 % arable
area. The contribution of textile industry or cotton based products is around 60 % of the
Pakistan’s total exports and one of the major source of foreign exchange. Despite the fact that
Cotton crop is the backbone of Pakistan’s textile sector and hence Pakistan’s economy, during
last decade, the area under cotton crop cultivation has been reduced significantly by 12.1 percent
from 3.106 million hectares in 2009-10 to 2.373 million hectares in 2018-19. Resultantly, cotton
production has also decreased by 17.5 percent from 12.974 million bales in 2009-10 to 9.861
million bales. In order to meet local requirement and consumption by the vibrant textile sector,
Pakistan has to import cotton by spending about 1-1.5 billion dollars, thus putting burden on
meager reserves. The declining trend in cotton production area is mainly due to shifting of
farmers from cotton growing to Sugarcane crop and some other crops. It is also the result of
establishment of sugar mills in cotton growing belt and incentives provided by the sugar mill
owners to farmers for the cultivation of sugarcane crop instead of cotton crop. The higher cost of
cotton production also discourages farmers to grow cotton crop and provide stimulus for shifting
to other crops especially sugarcane crop. In spite of the fact that ban has been imposed for the
establishment of sugar mills in cotton growing areas but it was not implemented in true letter and
spirit. If this declining trend of farmers to grow cotton is not arrested, it will badly affect the
textile industry and Pakistan’s economy. Government has to implement crop zoning, ban on the
establishment of sugar mills in cotton growing areas and investment in cotton research and
development for improving the cotton production by introducing high yield varieties suitable to
local weather conditions. If, timely measures were not taken, it will be devastating to cotton crop
and ultimately to Pakistan’s economy.

ii
 GLOSSARY OF TERMS

 Competitive crops: Crops having almost the same sowing season and locality, which
can replaced one another. Sugarcane, maize and rice can be termed as competitive
crops of cotton crop

 Gross Domestic Product (GDP): GDP is the final value of the goods and services
produced within the geographic boundaries of a country during a specified period of
time, normally a year. GDP growth rate is an important indicator of the economic
performance of a country.

 Pest Management: It is a process used to solve pest problems while minimizing risks
to people and the environment. An ecosystem-based strategy that focuses on long-term
prevention of pests or their damage through a combination of techniques such as
biological control, habitat manipulation, modification of cultural practices, and use of
resistant varieties. Pesticides are used only after monitoring indicates they are needed
according to established guidelines, and treatments are made with the goal of removing
only the target organism.

 Ratoon Crop: A new crop that grows from the stubbles of the crop already harvested.

 Subsidy: A sum of money granted by the state or a public body to help an industry or
business keep the price of a commodity or service.

iii
 TABLE OF CONTENTS

Table of Contents
PREFACE..................................................................................................................................................... i
EXECUTIVE SUMMARY ........................................................................................................................ ii
GLOSSARY OF TERMS .......................................................................................................................... iii
TABLE OF CONTENTS .......................................................................................................................... iv
CHAPTER 1 ................................................................................................................................................ 1
INTRODUCTION................................................................................................................................... 1
1.1 Statement of the Problem/Hypothesis.......................................................................................... 2
1.2 Significance and Scope of the Study ............................................................................................ 2
1.3 Limitations ..................................................................................................................................... 3
CHAPTER 2 ................................................................................................................................................ 4
LITERATURE REVIEW ...................................................................................................................... 4
CHAPTER 3 ................................................................................................................................................ 7
RESEARCH METHODOLOGY .......................................................................................................... 7
CHAPTER 4 ................................................................................................................................................ 8
RESULTS AND ANALYSIS ................................................................................................................. 8
4.1 Role of Cotton Crop in Pakistan’s Economy ............................................................................. 8
4.2 Area under Cotton Crop and Production during last 10 Years ............................................. 10
4.3 Reasons for Reduction in Cotton production Area and its Impact on cotton production ... 12
4.4 Crops substituted the Cotton Crop and Role of Sugarcane crop viz-i-viz Cotton crop ....... 12
4.5 Import of Cotton for Domestic industry Requirements ........................................................... 13
CHAPTER 5 .............................................................................................................................................. 14
CONCLUSION AND RECOMMENDATIONS ................................................................................ 14
5.1 Summary of Results .................................................................................................................... 14
5.2 Conclusions .................................................................................................................................. 14
5.3 Recommendations ...................................................................................................................... 15
BIBLIOGRAPHY ..................................................................................................................................... 16

iv
CHAPTER 1

INTRODUCTION
Cotton crop is lifeline of Pakistan’s textile industry. It is planted on 15 percent of arable
land during kharif season mostly concentrated in two provinces i.e., Punjab accounting for 75 %
and Sindh nearly 25 %.The textile sector is the largest industrial sector in Pakistan and accounts
for about 40 % of the industrial labour force and employs 10 million people (Cotton and
Products Annual 2019, Global Agricultural Information Network, USDA Foreign Agriculture
Service dated 4.2.2019, Gain Report Number: Pk1908).

It is pertinent to mention that there is a large and vibrant textile industry with over 1000
ginning factories and 5,000 oil expellers, 400 textile mills, 7 million spindles, 27,000 looms in
the mill sector and over 25,000 in the non-mill sector, 700 knitwear units, nd 4,000 garment
units etc., making cotton based textile industry the most important sector of Pakistan’s economy.

Figure 1: Cotton- based industries of Pakistan

30.000
27.000
25.000
25.000

20.000

15.000

10.000

5.000
5.000 4.000
1.000 400 700
0
Ginning Oil Expellers Textile Mills Looms in Mill Looms in Non- Knitwear Garment
Factories Sector Mill Sector Units Units
Ginning Factories Oil Expellers Textile Mills
Looms in Mill Sector Looms in Non-Mill Sector Knitwear Units

1
 Cotton crop earns the country’s largest export revenues and in addition to the lint, the
seed of cotton for oil and meal account for 80 % of national production of oilseed. Cotton and
cotton related products contribute 10 percent to Gross Domestic Product (GDP) and 55 % to the
foreign exchange earnings of the country (Economic Survey of Pakistan, 2015-16). The major
cotton and cotton based exportable products include Raw Cotton, Cotton Waste, Cotton Yarn,
Cotton cloth, Tents & Canvas, Cotton Bags, Bed sheets, Towels, Readymade Garments, Hosiery
and other miscellaneous items etc. However, there is a consistent fall in cotton cultivation area
for the last seven years, which eventually has reduced crop production to about 10 million bales
in 2019 from the bumper crop of 15 million bales in 2011-12.

However, if this declining trend of area under cotton cultivation, resulting in lesser
production, is not arrested, it will ultimately result in bigger bill for cotton imports to meet local
industry requirements and a burden on country’s depleted foreign exchange reserves. It will also
reduce the job opportunities at various level (Parvez Ashfaq Rana, The Dawn, January 4, 2019)

1.1 Statement of the Problem/Hypothesis

Despite the fact that Cotton is an important cash crop of Pakistan and vital for Pakistan’s
economy by contributing major share in GDP growth, labour force and earning foreign
exchange, but during the last few years, area under cotton crop has been decreased significantly
and replaced by some other crops especially sugarcane and maize, resulting in low cotton
production. Due to reduced cotton cultivation area, there is a need to import raw cotton to meet
local textile industry’s requirement. This declining trend in cotton cultivated area and resultantly
reduction in its production has a devastating economic impact on Pakistan’s economy.

1.2 Significance and Scope of the Study

The objective of this study is to assess the reasons of reduction in cotton cultivated area
and its production during the last decades. Cotton is one of the most important cash crop of
Pakistan which is grown over an area of about 2.68 million hectares, thus cotton is the second
most crop occupying the arable area after wheat crop. During this study, it will be assessed and
analyzed that how this reduction in cotton cultivated area impact Pakistan economy.

2
 This research study will also suggest some policy measures for improving the current
situation which ensures increased cotton production by increasing not only area under the crop
but also to tap the potential per acre yield.

1.3 Limitations
This study has been completed in short period during training course and in the prevalence
of COVID-19 pandemic. Therefore, it is not possible to plan extensive and detailed field visits
to interact with the concerned professionals to have deliberations on the issue for comprehensive
understanding regarding the intending long term impact on Pakistan’s economy. However,
efforts have been made to get secondary data from earlier studies, research reports, articles and
from the concerned federal and provincial department statistics.

3
CHAPTER 2

LITERATURE REVIEW

Cotton is considered as vital crop for Pakistan’s economy with 0.8 % share in GDP and
4.5 % contribution in value addition. However, cotton crop faces lot of challenges especially
with regard to its competing crops especially sugarcane, high cost of production and
unfavourable international prices etc. During 2018-19 cotton production reduced to 9.861 million
bales, which are about 17.5 less than the previous year. This decrease in cotton production
mainly due to reduced cotton production area. The area under cotton crop decreased 12.1 percent
from 2.700 million hectares in 2017-18 to 2.373 million hectares in 2018-19, (Economic Survey
of Pakistan 2018-19).

Parvez (2019) reported that declining area under cotton cultivation area over the years is
resulting in lesser cotton production and if the trend is not arrested it will ultimately result in
footing bigger bill for cotton imports and burden on country’s depleted foreign exchange
reserves. Over the past few years, growers shifted from cotton to sugarcane due to various
reasons, the most important being the political clout wielded by the sugar industry. Furthermore,
growers preferred sugarcane as it is ales labour intensivecrop and plant root stays for a minimum
of three years, i.e. sugarcane being a “Ratoon crop”. Unfortunately, cotton production has been
reduced to the extent that today Pakistan has to import a substantial quantity of cotton by
spending between 1-1.5 billion dollars to meet domestic textile and related industries
requirements.

Ashraf, S et al (2018) concluded that compound growth of cotton indicated negative

growth in area in Pakistan and the Punjab province, whereas production of cotton is expected to
face decline in coming years. Forecasting of cotton production is exhibited positive growth and
rise in area, production and yield of cotton in Pakistan. However, in Punjab, area and production
appeared inverse, as area is expected to rise while production and average yield will face decline
in future. This decline will be a major blow to Pakistan’s economy and livelihoods of the cotton
growers. It has been emphasized that steps to be taken to boost cotton production to meet
domestic requirement and also to earn foreign exchange.

4
 Rehman, A et al (2016) investigated the relationship between agricultural domestic
product (AGDP) and output of cotton, area under cotton crop and fertilizer consumption in
Pakistan. The results of co-integration revealed that there exists a long term relationship between
output of cotton crop, area under cotton, fertilizer consumption and agricultural gross domestic
product of Pakistan. The results of regression analysis showed that output of cotton crop and
fertilizer consumption has positive relationship with agricultural gross domestic product of
Pakistan, while area under cotton crop has a negative relationship with agricultural gross
domestic product of Pakistan.
Global Agricultural Information Network– USDA Foreign Agricultural Service- Gain
Report, 4/2/ 2019 : Gain Report Number: PK 1908, noted in the report that cotton production is
forecasted at 8.0 million (480 lb bales), up 500,000 bales from the revised 2018-19 estimates.
This projected production reflects a modest increase in area due to recent government incentives
to enhance cotton production in the country. Yield is expected to be higher than last year based
on sufficient water and certified seed availability. About 95 percent Pakistan’s cotton crop is
bioengineered. Textile mill consumption is forecast slightly higher at 10.7 million bales as
demand for cotton products is expected to rise with government support for textile exports. With
mills having strong interest in higher-grade quality cotton to meet demand for higher quality
products, the import forecast is 3.0 million 480 lb. bales. With Pakistan’s developed
biotechnology and seed regulatory structure, investment and implementation would facilitate the
introduction of improved cotton seed in the country.

Shuli, F et al (2018) reported that Pakistan is the world’s largest number 4th producer of
yarn, 2nd largest exporter, and the seventh largest cloth producer. Pakistan’s cotton products for
nearly 60% of its overseas earnings. However, at least 2% of gross domestic product (GDP) of
Pakistan intemperately reliant on cotton and its derivations and about 10 % of its value added in
agriculture. According to the international advisory cotton commission, the cotton yield in 2014 to
2016 diminution by 27pc to 8.95m bales, mainly due to agronomical-environmental changes,
rivalry along other crops, very low market costs and eruption of harmful pink bollworm.

Ministry of Interior, Government of Pakistan,“Report of the Commission of Inquiry to

Probe into the Increase in Sugar Prices” 2020, (Page:155) reported that despite the complete
ban, as per law, on establishment of new sugar mills and capacity enhancement, the sugar mills,

5
prima-facie, have violated the law and enhanced their crushing capacity. It has also mentioned
that the purpose of ban on establishment of new sugar mills and capacity enhancement was to
protect the cotton cultivation area from being taken over by the cultivation of sugarcane. In the
same report (Page:278) quoted that the Cane Commissioner, Government of Sindh stated that
every year 25,000 acres cultivation of Sugarcane increases and on the other hand cultivation of
Cotton is reduced. In this way, Cotton belt has started converting into sugarcane growing area.

6
CHAPTER 3

RESEARCH METHODOLOGY

The study is descriptive in nature based on secondary data obtained from published
reports of various Federal & Provincial Departments, Bureau of Statistics, Economic Survey of
Pakistan, national and international published reports on agriculture, Pakistan Ginners
Association, Ministry of National Food Security and Research etc. The role of competing crops
to cotton such as sugarcane and maize will also be discussed.

Keeping in view the nature of study, there is no need to conduct any kind of survey, thus
no sampling technique will be used. There is sufficient secondary data regarding is available for
the study in hand. The same will be used to analyze and assess the impact of reduced area under
cotton crop on Pakistan’s economy. The reasons behind the trend of declining area under cotton
crop over the years and competing crops will be assessed. At the end, some policy measures will
also be suggested to rectify the situation and improve cotton production in future.

7
CHAPTER 4
RESULTS AND ANALYSIS

4.1 Role of Cotton Crop in Pakistan’s Economy

Agriculture is significant contributor of Pakistan’s economy and cotton crop is one of the
major cash crop cultivated mainly in Punjab and Sindh province by 1.3 million farmers on about
15 % of the arable land of Pakistan. The share of cotton production by Punjab province is 80%,
whereas share of Sindh is about 18%. The remaining 2% cotton is produced by Khyber
Pakhtunkhwa and Baluchistan provinces. Cotton accounts for 5.2 % of value added in agriculture
and 1 % Gross Domestic Product (GDP) of Pakistan. It facilitates textile sector tremendously,
which is one of the mainstay of Pakistan’s economy. Pakistan stands in 4th in cotton production
and third largest cotton consumer of the world.

In addition to above, cotton has about 70% share in locally produced edible oil in
Pakistan. Cotton seed cake is one of the major sources of cattle feed to enhance milk production.
Even stalk of the cotton plant is used as a fuel in rural areas and to improve soil organic matter.

The cotton production has direct correlation with the agricultural growth and its share in
GDP growth of Pakistan. The below table clearly show that when cotton production increases it
has positive impact on agriculture growth as well as GDP growth. On the other hand, the year in
which cotton production decreases, there is significant decline in agriculture and GDP growth.
The economic importance of cotton crop can be judged from the facts given in the table below.

Table-1: Economic importance of cotton

Economic Importance of Cotton
Year Cotton Production Agricultural Growth Manufacturing Growth GDP Growth
(Million Bales) (%age) (% age) (%age)
2004-05 14.265 6.5 15.5 9.0
2005-06 13.019 6.3 8.7 5.8
2006-07 12.856 3.4 9.0 5.5
2007-08 11.655 1.8 6.1 5.0
2008-09 11.819 3.5 -4.2 0.4
2009-10 12.914 0.2 1.4 2.6
2010-11 11.460 2.0 2.5 3.6

8
2011-12 13.595 3.6 2.1 3.8
2012-13 13.031 2.7 4.9 3.7
2013-14 12.769 2.5 5.7 4.1
2014-15 13.960 2.5 3.9 4.0
2015-16 9.760 0.1 5.0 4.7
2016-17 10.720 2.1 5.8 5.37
2017-18 11.940 3.8 6.24 5.79
2018-19 9.800 0.85 -0.27 3.3

The above table-1 clearly depicts that in the years of high cotton production such as
2004-05, 2005-06 and 2006-07, there is significant increase in agricultural and manufacturing
growth, and growth in GDP of Pakistan. As the cotton production decreases to the level of
9.760 million bales in 2015-16 and 9.800 million bales during 2018-19 respectively, therefore,
the agricultural growth during 2015-16 and 2018-19 was remained as low as 0.1 % and0.85 %
respectively . Even, the above table shows that agricultural growth was –0.27 and GDP 3.3 %.
Although, there are many factors for the negative manufacturing growth, but one of the major
factor was reduced cotton production during 2018-19. The Figure-1 below gives a correlation
between cotton production and agricultural growth, manufacturing growth and GDP of Pakistan
from2004-05 to 2018-19.

Figure -1: Cotton Production and its Correlation with agricultural growth, manufacturing growth
and GDP growth %age.

Cotton Production and its correlation with Agricultural, Manufacturing

and GDP Growth Percentage
15 20
Percentage Growth
Cotton Production (Million Bales)

15
10 10
5
5 0
-5
0 -10

Year

Cotton Production (Million Bales) Agricultural Growth (%age)

Manufacturing Growth (% age) GDP Growth (%age)

9
4.2 Area under Cotton Crop and Production during last 10 Years
There is a declining trend in cotton production area from 3.108 million hectares is 2009-
10 to 2.373 million hectares in 2018-19. The below Table-2, provides an insight about the trend
of area under cotton crop and corresponding production during last 10 years, as well as percent
change in area and production during this period.
Table-2: Cotton area, production and % change during last 10 years
Year Area Production
Million Hectares % Change Million Bales % Change
2009-10 3.106 - 12.914 -

2010-11 2.689 -13.4 11.460 -11.3

2011-12 2.835 5.4 13.595 18.6

2012-13 2.879 1.6 13.031 -4.2

2013-14 2.806 -2.5 12.769 -2.0

2014-15 2.961 5.5 13.960 9.3

2015-16 2.902 -2.0 9.917 -29.0

2016-17 2.489 -14.2 10.671 7.6

2017-18 2.700 8.5 11.946 11.9

2018-19 2.373 -12.1 9.861 -17.5

The above Table-2 shows that the highest area under cotton crop production was in
2009-10, which was 3.106 million hectare, which is reduced over the years to 2.373 million
hectares during 2018-19. In the year 2016-17, the cotton production area was decreased by 14.2
%, however, due to other favourable factors, cotton production remains higher than the previous
year i.e. 2015-16. It is noted that due to decrease in cotton production area by 12.1 % in 2018-19,
cotton production decreased to 9.861 million bales which is 17.5% less. The area under cotton
crop and its corresponding production from 2008-09 to 2018-19 has been shown in the figure -2
below.

10
 Figure-2: Cotton area & production in Pakistan during last 10 years

Cotton Area & Production in Pakistan during last 10 years

Area (Million Hectares) Production (Million Bales)
13,595 13,96
12,914 13,031 12,769
11,46 11,946
10,671
9,917 9,861

3,106 2,689 2,835 2,879 2,806 2,961 2,902 2,7

2,489 2,373

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19

Source: Economic Survey of Pakistan, Bureau of Statistics, Govt. of Pakistan

Figure-3:% Change in Cotton area & production during last 10 years

% Change in Cotton Area/Production during last 10 years

30

20

10
Area/Production

0
% Change

-10

-20

-30

-40
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018-
11 12 13 14 15 16 17 18 19
Area (% Change) -13,4 5,4 1,6 -2,5 5,5 -2 -14,2 8,5 -12,1
Production (% Change) -11,3 18,6 -4,2 -2 9,3 -29 7,6 11,9 -17,5

Source: Economic Survey of Pakistan, Bureau of Statistics, Finance Div., Govt. of Pakistan

11
 The above Figure-3 shows percentage change in cotton area and production from 2010-
11 to 2018-19. In the year 2010-11, there was 13.4 % decrease in cotton area and 11.3% decrease
in production. Similarly, there is a reduction of 12.1 % area and 17.5 % production of cotton
during 2018-19.

4.3 Reasons for Reduction in Cotton production Area and its Impact on
cotton production
There are a number of reasons for declining in cotton production area over the years and
shifting to other crops including high cost of production and less economic incentive, prevalence
of high infestation of insect pests, unfavourable national and international markets, prolonged hot
and dry weather conditions leading to lower cotton production etc. However, the major reason is
shifting to other profitable crops especially sugarcane and maize. The establishment and shifting
of sugar mills from Central Punjab to cotton growing belt of South Punjab. In Sindh province
also cotton mills were established in cotton growing districts. The sugar industry owners
provided incentives to cotton growers for planting sugarcane instead of cotton. This shift by
farmers from cotton crop to sugarcane played a havoc to the most important cash crop of
Pakistan and backbone of Pakistan’s economy.

4.4 Crops substituted the Cotton Crop and Role of Sugarcane crop viz-i-viz
Cotton crop
During the last decade, area under cotton crop has been shifted to other crops especially
sugarcane, maize and rice. About 30 % of cotton area is replaced by sugarcane whereas 15 % by
other crops. Unfortunately, despite the fact that there is an acute shortage of irrigation water in
Pakistan, cotton production area is consistently declining and mainly shifted towards sugarcane
crop, whose water requirement is 2-3 times greater than cotton crop. In order to estimate the
economic loss to Pakistan economy due to this trend can be judged from the ground realities
such as; Cotton crop is short duration and requires less irrigation water whereas sugarcane crop
is long duration / whole the year crop utilizing twofold or threefold more water than cotton crop.
Another important aspect is that cotton is major contributor in exports which is almost 60% of
Pakistan exports and it earns much needed foreign exchange, but on the other hand if we have to
export sugarcane, Pakistan has to provide subsidy.

12
 There is a huge range of cotton products such as Yarn, Cotton Seed, Cotton flakes, oil
expellers, ginning factories, spinning units, readymade garments, textile mills, power looms,
hoiesery etc. Cotton products are branding for Pakistan and As per “Report of The Commission
of Inquiry constituted by Ministry of Interroir to Probe into the Increase in Sugar Prices (2020)
Page 58”, during last 4-5 years, Pakistan has provided about 29 billion dollars subsidy to
sugarcane industry for the export of about 4.0 million tonnes of sugar. It is noted that sugar is
much cheaper to import if Pakistan needs to fulfill its domestic requirement, in case shortage of
sugar production.

Cotton and its allied industries provide directly and indirectly about 20 million jobs,
whereas sugar industry provides employment to nearly o.1 million people for short period only.
By promoting cotton, there is circulation of money among millions of people but in case of sugar
industry due to limited employment opportunities and monopoly of few groups, benefit to the
sugar industry owners. Generally sugar industry also exploits the farmers and payment of their
crop is made after considerable delay, whereas in case of cotton, farmers are made cash payment.

4.5 Import of Cotton for Domestic industry Requirements

Pakistan’s local cotton consumption is about 11.00 million bales. But, during last few
years due to reduced cotton production area and subsequently less production, Pakistan imported
cotton worth 1-1.5 billion dollars per annum. Thus, it has a major blow to the already meager
and depleted foreign reserves of the country.

13
CHAPTER 5

CONCLUSION AND RECOMMENDATIONS

5.1 Summary of Results

The analysis of data reveals that Cotton is major contributor of Pakistan’s economy and
backbone of textiles industry of Pakistan. The textile sector provides employment to millions of
peoples and also contributes about 60 % to Pakistan’s total export and foreign exchange. It is
also source of livelihoods of about cotton growing farmers. The cotton based industries are
ranging from Ginning Factories to Oil Expellers, Textile Mills to Garments units and Knitwear
units etc. There is also a huge range of cotton and cotton related products for local consumption
and for exports such as Raw Cotton, Cotton Cakes, Cotton Waste, Cotton Yarn, Cotton cloth,
Tents & Canvas, Cotton Bags, Bed Sheets, Towels, Readymade Garments, Hosiery items and
other miscellaneous items etc. However, during last decades, the area under cotton crop is
significantly reduced; resultantly there is a considerable decrease in cotton production even not
enough to meet the local textile industry.

The major reason behind, shrinkage of cotton production area is competing

crops to cotton especially sugarcane. Over the years, sugar mills have been established in the
cotton growing districts of Punjab and Sindh province. On the one hand, the sugar mill owners
provided various incentives to cotton growers to grow sugarcane crop to feed their sugar mills.
On the other hand, cost of cost production was much higher, which also stimulate farmers to shift
from cotton to sugarcane crop. Resultantly, during last decade about 18 % of cotton crop area has
been replaced by other crops especially Sugarcane crop. Reduction in area under cotton crop
means decreased cotton production in Pakistan.

5.2 Conclusions
The primary focus of the study was to assess the impact of reduced area under cotton crop
on Pakistan’s economy and to analyze the reasons for this reduction in area. This study proved
that over the years, there is a significant reduction in cotton cultivated area due to mainly
competitive crop Sugarcane. The establishment of sugar mills in cotton belt and higher cost of
cotton production played a major role in thinking the farmers to shift from cotton to sugarcane

14
crop. This shift and reduction in cotton area resulted in consistent decreasing trend in cotton
production and compelling Pakistan to import cotton by spending already depleting reserves, to
fulfill the local textile industry requirements, which is a major source of foreign exchange
earnings and employment. Thus, study proved that reduction in cotton area is a devastating
economic impact for Pakistan’s economy.

5.3 Recommendations

On the basis of analysis and results of this discourse, the following recommendations are
made to ensure that cotton is locally grown and produced not only to meet local industry
requirements but also to provide livelihood to 1.3 million cotton growers/farmers and earn
foreign exchange by exporting cotton based products:

i. Implementation of Crop zoning to ensure that planting of sugarcane crop is not

allowed in cotton growing districts/ cotton belt. Moreover, strict implementation of
ban on sugar mills in cotton growing areas especially Bahawalpur, Multan and Dera
Ghazi Khan Divisions.
ii. Special focus on Research and Development ensuring climate change resilient, pest
resistant high yielding varieties. Because cotton production can be enhance through
increased area under cotton crop, as well as introducing such varieties which have
high yield potential per acre. Investment in agriculture research and development and
in adoption of technology is a key to obtain long terms benefits from the agriculture,
cotton crop and textile industry.
iii. Cost of cotton production is higher which discourage farmers to grow cotton and they
tend to shift on growing other crops. For reduction in cost of production, prices for
input may be controlled and reduced so that farmers can afford and increase their
production.
iv. Government should pay attention and introduce special initiatives for the provision of
quality seed of cotton crop, fertilizers and pesticides at affordable prices.
v. Extension services must be strengthened to educate the farmers and also assist in Pest
Management, so that judicious use of pesticides can be ensured to save the
environment and get optimum cotton yield. Special incentives for using technology
in cotton picking to improve the quality of the produce.

15
 BIBLIOGRAPHY

1. Ashraf, S et al (2018). Future of Cotton Sector in Pakistan: A 2025 Outlook, In-Service

Agricultural Training Institute, Rahim Yar Khan, Pakistan Journal of Agricultural
Research, Vol.31, Issue 2 , Page 145, June 2018.
2. Cotistics. Annual Cotton Statistics Bulletin, Directorate of Marketing & Economic
Research, Pakistan Central Cotton Committee (PCCC), Ministry of National Food
Security and Research, Government of Pakistan, Vol.48, October, 2019.
3. Economic Survey of Pakistan (2018-19), Finance Division, Government of Pakistan,
Islamabad.

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