ISLAMABAD: The government considers allowing the Trading Corporation of Pakistan (TCP) to purchase lint from ginners as part of a plan to extend support to farmers, an official told Dawn on Monday.
The proposal for support price in the shape of subsidy came from the Punjab government with a pretext to provide support to farmers.
The official said it was suggested in the summary to announce an indicative price for the cotton on the pattern of wheat. Similarly, the intervention will be made through TCP by directly buying lint from ginners. The summary was submitted to the Economic Coordination Committee of the cabinet for consideration by the textile industry.
The official added that the Ministry of Commerce has opposed the move on the plea that buying lint will only provide support to ginners.
“There will be no trickledown effect to the farmers”, the official said.
In India, government buys phutti (cotton seed) on the pattern of wheat to stabilise the market, which is a direct support to farmers.
According to the official, the government has spent more than Rs3 billion in subsidy on buying lint from ginners in 2013-14.
“There was hardly any benefit pass on to farmers,” the official said. He went on to add that TCP has no infrastructure for storage of phutti as well as no ginning factories.