Govt approves cotton revival plan, FBR to collect cess for the sector’s recovery

An inter-ministerial meeting chaired by Deputy Prime Minister and Foreign Minister Senator Ishaq Dar has approved a comprehensive plan to revive Pakistan’s cotton industry, which includes the collection of cess through the Federal Board of Revenue (FBR). The plan addresses key challenges facing the sector, including seed quality and the performance of research and development (R&D).

According to reports, this decision comes as cotton production in the 2025-26 season has dropped significantly to 6.8 million bales, 34% below the target of 10.18 million bales.

During the meeting, the Cotton Commissioner from the Ministry of National Food Security & Research (MNFS&R) presented the implementation plan, which incorporates recommendations from the All Pakistan Textile Mills Association (APTMA). 

Representatives from APTMA proposed the establishment of an independent Cotton Board, similar to the United States model, to oversee all cotton-related matters. However, the Federal Minister for National Food Security & Research clarified that the ongoing merger of the Pakistan Agriculture Research Council (PARC) and the Pakistan Central Cotton Committee (PCCC) would resolve the issues raised by the industry.

The Chairperson of the National Seed Development and Regulatory Authority (NSDRA) emphasized the importance of quality seed regulation for the success of the revival plan. As a result, the committee agreed to include NSDRA representation in the Apex Body overseeing the implementation of the plan.

The meeting also discussed the underperformance of the PCCC’s R&D efforts, which have been hindered by a lack of funding. The Secretary of MNFS&R pointed out that the cotton cess rate, which has remained fixed at Rs. 50 per bale since 2011, needs to be increased in line with a decision by the Economic Coordination Committee (ECC) from the same year. The committee agreed to collect the cess through the FBR and raise the cess rate as per the ECC’s guidelines.

The meeting concluded with a reaffirmation of the government’s commitment to the cotton revival initiative. A Memorandum of Understanding (MoU) will be signed between MNFS&R/PCCC and FBR, outlining the Standard Operating Procedures (SOPs) for cess collection. 

The Pakistan Cotton Advisory Council (PCAC) or PCCC Board will also have majority representation from the cotton industry to ensure its involvement in the decision-making process. A significant portion of the cess collected will be allocated to R&D in the cotton sector.

Senator Dar concluded the session by reaffirming the government’s commitment to ensuring that the cotton revival initiative remains led by the industry, under APTMA’s leadership.