20000401

Growers urge govt

to reactivate CEC

RECORDER REPORT

MULTAN: Cotton growers have urged the government to reactivate the Cotton Export Corporation (CEC), in the coming cotton policy for 2000-2001, which was closed to protect the vested interests of bureaucracy despite the fact that policies of the government to operate CEC did not always result from purely business consideration but were mostly based on socio-political consideration, keeping cotton growers' interest in view.

During a survey conducted by Business Recorder. In the light of the coming cotton policy being framed by the government the study has revealed that CEC in its 20 years business activity made overall profit of Rs 5,244 million and paid Rs 12 million to the government as export duty on cotton.

The CEC was closed in the second tenure of Nawaz Sharif to keep the vested interest of bureaucracy.

Independent sources said that it was a daylight fact that cotton is the backbone of the country's economy and such a precious commodity's trade is not free even in the USA which is the champion of free trade and whenever the interest of growers demands the United States Department of Agriculture (USDA) intervenes promptly to protect their interest.

The creation of Trading Corporation of Pakistan (TCP) failed last year's cotton season when growers sold their valuable cash crop at Rs 450 to Rs 500 per maund the TCP could not benefit a common grower or ginner. It also could not function due to lack of requisite expertise. The country would not be able to earn needed foreign exchange owing to present pace of TCP working, and exporter observed.

On the other hand, CEC has its own storage points, office infrastructure, manpower, technical equipments and sample rooms. The deposed PML government forcibly retired the experienced staff by imposing golden handshake on the pretext that the government did not intend to involve in trade, but later on the government carried out the same activity through TCP. The CEC employees have also demanded of the government to call them on duty who were sent home under the shadow of voluntary retirement. The TCP has also engaged ex-employees of CEC to run the business. According to unofficial sources, CEC total sale was Rs 99 billion, cost of sale Rs 86 billion, and gross profit Rs 9 billion, operative expenses Rs 4.5 million, other incomes Rs 1.6 billion. Total profit before export duty and taxation was Rs 6.4 billion. Export duty paid to the government Rs 12,366 billion, tax paid to the government Rs 1.289 billion, total accumulated loss in 24 years Rs 7.1 billion; The subsidy paid to growers during 1985-86, 1986-87, 1991-92 and 1992-93 at Rs 5.3 billion.

The CEC was established through a legislation but it was closed on just verbal orders of the former commerce minister Ishaq Dar.