A Pakistan cotton ginners trade body has demanded that cotton farmers be assured a government support price to stop their exploitation by textile mills.
At a press conference, office bearers of the Pakistan Cotton Ginners Association (PCGA) demanded a ‘support price’ for phutti or seed cotton to save farmers and ginners from exploitation by textile mills.
They also demanded a resolution to the problem of low-voltage electricity, supplied by power companies, which has badly damaged their machinery and equipment.
Among other demands, they also suggested withdrawal of 5 percent general sales tax (GST) imposed on oil cakes consumed by livestock.
They alleged that seed cotton prices posted a decline of Rs 700 per maund (1 maund = 40 kg) during the current crop season due to the GST imposed on oil cakes.
They said, currently seed cotton is being traded at Rs 2,400 to Rs 2,600 per maund against Rs 3,200 to Rs 3,300 per maund prevailing in June earlier this year.
They also added that the cotton industry was facing its worst ever crisis because oil mills were not willing to buy the oil seeds (seeds left over after ginning) at reasonable rates.
They said imposition of GST had led to lower prices of phutti, slowed the sales of oil seeds and at the same led to rise in prices of oil cakes, proving disastrous for farmers and ginners alike.
If this situation prolongs, farmers may switch to alternative crops, leading to lower cotton production in the next season, which in turn may lead to higher cotton imports, further draining the precious foreign exchanges reserves of the country, they added.
They also said that Finance Minister - Ishaq Dar had promised to withdraw this tax, but as of date there has been no notification from Ministry of Finance.
