Caretaker Prime Minister Anwarul Haq Kakar has taken notice of buying cotton production below the prices set by the government to help the farmers. He directed the Trading Corporation of Pakistan (TCP) to investigate the matter and submit a report on the matter. The government had fixed the price of cotton but it was seen that in some places cotton was being bought from the farmers at a minimum rate.
The caretaker prime minister emphasized the importance of the bumper cotton crop for the country and emphasized that the farmers should get maximum returns. The government had issued clear instructions regarding the purchase price to protect the farmers from losses.
In March, former prime minister Shahbaz Sharif approved a support price of Rs 8,500 per 40 kg (mn) for cotton to help farmers. However, in August, TCP decided to buy 1 million bales of cotton due to a fall in prices in the open market. The decision was taken after the International Monetary Fund (IMF) withdrew subsidized rates for electricity and gas to textile mills. These factors, along with a significant increase in the cost of production, resulted in a reduction in cotton purchases by textile mills, resulting in the open field price of cotton falling from Rs 9,500 to Rs 7,500 to Rs 8,000 per maund.
The government recently forecast a significant increase in cotton production, estimated at 11.5 million bales from an area of 2.4 million hectares, representing a 126.6 percent increase over the previous year.
Additionally, the Federal Committee on Agriculture (FCA) reported a substantial increase in cotton output, with a 126.6% boost in the 2023-24 season, resulting in an estimated production of 11.8 million bales cultivated over 2.4 million hectares. The FCA also reviewed the performance of Kharif Crops and the production plan for Rabi crops, noting growth in rice output by 12.7% and a provisional estimate of 8.64 million tons of rice production for 2023-24. Other crops like mung beans, mash, and chilli also showed varying levels of increase in production.
To support the agriculture sector, the State Bank of Pakistan assigned an annual indicative agricultural credit disbursement target of Rs. 2,250 billion for fiscal year 2023-24, 26.7% higher than the previous year’s disbursement. During July-August 2023, agricultural lending institutions disbursed Rs. 326 billion, 14.5% of the overall annual target and 44% higher than the previous year’s disbursement during the same period.
Despite an expected 15 percent water shortage in Punjab and Sindh during the Rabi season, the government has facilitated farmers with cheaper inputs and better prices for their produce to bridge the gap between their production costs and output prices.