ECC rejects intervention price for cotton procurement.

Byline: Khaleeq Kiani

ISLAMABAD -- Amid contesting agriculturists, the Economic Coordination Committee (ECC) of the cabinet on Thursday rejected an intervention price for cotton procurement in the public sector and approved an incentive policy for local manufacturing and assembly of mobile phone sets.

Informed sources told Dawn that Minister for National Food Security and Research Syed Fakhr Imam's recommendations for a minimum intervention price for procurement of cotton through the Trading Corporation of Pakistan (TCP) came up for discussion at the ECC meeting.

Originally, Mr Imam came up with Rs4,224 per 40kg intervention price which was scaled down to about Rs4,000, but the proposal was turned down on merits of the intervention price rather than the amount.

Foreign Minister Shah Mehmood Qureshi attended the ECC meeting as a 'special guest' for pleading farmers' case for a minimum intervention price to improve their cash flows and encourage them to grow more crop. Minister for Economic Affairs Makhdoom Khusro Bakhtiar also supported the farmers' case.

Approves incentive policy for local manufacturing, assembly of mobile phones

Adviser to the Prime Minister on Commerce Abdul Razzak Dawood countered the move. His prime argument was that textile industry was already disadvantaged to regional competitors like India because of their cheaper and better quality cotton availability. If the government blocks local textile mills from cheaper avenues, including through imports, it would mean damaging textile exports.

Adviser to the PM on Institutional Reforms Dr Ishrat Hussain, Minister for Industries and Production Hammad Azhar and Special Assistant to the PM on Petroleum Nadeem Babar and Finance Secretary Naveed Kamran Baloch supported the counter narrative and agreed that intervention price would be counterproductive and open up a Pandora's box.

Adviser to the PM on Finance and Revenue Dr Abdul Hafeez Shaikh, who presided over the meeting, said that while it was necessary for the government to support cotton farmers, there should be some targeted mechanism to directly benefit the deserving, instead of intervention price. He advised Mr Imam to come up with a long-term solution to improve quality and increase output of cotton, saying the government would provide every possible support.

It was argued that cotton was a commercial crop and could not be compared with wheat or sugarcane crops for which support price or intervention price could be...