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Pakistan's Cotton Crisis: Farmers Flee as Taxes and Policy Failures Mount

Pakistani cotton farmers face a critical sowing season burdened by an 18% GST on inputs and soaring production costs, pushing many to consider alternative crops like sugarcane. The sector is reeling from a 34% shortfall in last season's national production target. Farmers and business forums are urgently calling for tax removal and policy reforms to prevent a further exodus from cotton cultivation. Provincial revival projects, like a PKR 2 billion plan for Bahawalpur, contend with deep structural issues including poor seed quality and weak pest monitoring.

Key Points: Pakistan Cotton Farmers Shift Crops Amid Tax Burden, Policy Failures

  • 18% GST on cottonseed cripples farmers
  • Production fell 34% short of national target
  • Policy failures and high costs fuel crop shift
  • Punjab aims for 0.7M acres amid sector crisis
3 min read

Pakistan's cotton sector under pressure as taxes and policy failures push farmers toward alternative crops

Soaring costs, 18% GST, and policy failures push Pakistani cotton farmers toward sugarcane, threatening national production targets and sector revival.

"without timely government support, several farmers may shift to crops such as sugarcane - Muhammad Aslam, cotton grower"

Lahore, March 6

As the cotton sowing season approaches in South Punjab and Sindh, farmers are preparing for the upcoming Kharif cycle amid mounting economic pressures. Growers say they are entering the season not only with seeds but also with a heavy tax burden that could influence their decision to plant cotton this year. Farmers believe these financial pressures could further accelerate the decline of cotton cultivation in Pakistan, as reported by The Express Tribune.

According to The Express Tribune, in addition to taxation, cultivators are grappling with soaring input costs, which they say have become an unavoidable reality in recent years. Even after completing the crop cycle, farmers often face uncertainty in the market where middlemen dominate the supply chain, leaving growers unsure whether they will receive fair prices for their produce.

Farming groups have repeatedly urged federal and provincial authorities to introduce immediate reforms to revive the cotton sector. Among the major demands raised by agricultural organisations is the removal of the 18 per cent General Sales Tax (GST) on locally produced cottonseed and oilcakes. Farmer representatives argue that the tax significantly increases production costs at a time when growers are already struggling to remain profitable.

Speaking on the issue, Pakistan Business Forum (PBF) Punjab President Malik Talat Suhail urged the Ministry of Finance and the Federal Board of Revenue to issue a Statutory Regulatory Order eliminating the GST, a step he believes would encourage farmers to expand cotton cultivation.

The call for relief comes as the Punjab government has set a target of cultivating cotton on 0.7 million acres during the early sowing phase. The provincial administration has also announced a PKR 2 billion project aimed at transforming the Bahawalpur Division into a cotton valley. However, the sector is still recovering from last year's disappointing performance.

The Federal Committee on Agriculture had fixed a national production target of 10.18 million bales for the 2025-26 season, yet actual production reached only 6.85 million bales, falling 34 per cent short of expectations. Farmers say the situation is pushing many to reconsider cotton farming altogether.

Muhammad Aslam, a cotton grower from South Punjab cultivating around 20 acres, said many farmers suffered financial losses last season due to floods and rising costs. He stated that without timely government support, several farmers may shift to crops such as sugarcane or leave their land unused, as cited by The Express Tribune.

Experts also point to deeper structural problems behind the decline of cotton. Weak pest monitoring systems, poor seed quality, limited mechanisation, and policy decisions favouring sugarcane cultivation have collectively contributed to shrinking cotton acreage.

In Punjab alone, land under alternative crops like sugarcane, rice, maize, and sesame has expanded by 22 per cent while cotton cultivation continues to shrink, as reported by The Express Tribune.

- ANI

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Reader Comments

S
Sarah B
Interesting read. The shift from cotton to sugarcane seems to be a regional pattern driven by short-term incentives. In the long run, it affects global textile supply chains. Hope they find a sustainable solution for their farmers.
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Ananya R
So sad for the farmers there. 🥺 Financial stress and uncertainty after a whole season of hard work is the worst feeling. Our government's MSP and procurement systems, while not perfect, do provide some safety net. This shows why agricultural policy is so crucial.
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Vikram M
A 34% shortfall in production target is massive! This will have ripple effects. Pakistan is a major cotton producer. If their output falls further, it could impact global prices, which might actually benefit Indian cotton exporters in the short term. But a stable neighbourhood is better for trade overall.
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Karthik V
The root cause is the same everywhere: poor seed quality and weak pest monitoring. We've seen BT cotton revolution in India, but it needs constant R&D support. Hope their farmers get access to better technology and fair prices. No farmer should be forced to leave land unused.
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Michael C
While the article focuses on taxes, the mention of "policy decisions favouring sugarcane" is key. It creates market distortions. Subsidies and support should aim for crop diversification and environmental sustainability, not just political popularity. A lesson for many countries, honestly.

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