The standard complain of Pakistan's textile industry is that cotton production is witnessing a freefall, led by a secular decline in acreage over the past decade. The trend coincided with retroactive regularization of Bt. cotton in 2010, ostensibly laying blame at the alter of biotech innovation.
That is a misnomer. The contraction in area under cotton following the adoption of Bt. is largely in line with global trends. That also makes intuitive sense, as the biotech revolution promised an exponential improvement in crop productivity, theoretically lowering the requirement for cultivated area under constant demand.
In fact, aggregate area under cotton in top five crop growing countries – responsible for 80 percent of global production – has inched forward at a CAGR of 0.07 percent since the first commercial adoption of Bt. in 1995 by USA. Adoption rate in all these countries today exceeds over ninety percent, as aggregate cotton production for the big five has leaped frogged by fifty-six percent over the past quarter century.
Pakistan's acreage contraction – while in line with the experience of leading nations such as US and China, where acreage has declined by one-fifths and two-thirds since the adoption of Bt., even as output has grown by 1.25 times. Back home, cotton's challenge is not one of fewer acres, but the unfulfilled promise of yield gains.
As yield in other early adopters charged ahead – Brazil recorded gains of over four times during the intervening years – domestic productivity has come full circle, with less than 70bps CAGR change. In fact, if provisional crop assessment for the ongoing harvest season is to be believed, country-wide yield may come in at 550 kg per hectares (or lower), possibly lowest in three decades.
After inching forward during the intervening period – FY15 area and yield stood at 3Mn ha & 802 kg ha respectively – crop numbers are back at square one, turning folks nostalgic for the times Bt. adoption. Yet, if the yield trends are any guide, declining acreage is symptom of a much larger malaise.
In fact, it has proven dangerous to confuse the effect with the cause. Output targets – driven by increasing domestic consumption which has doubled during these 25 years – continue to promise a revival in area to fulfill local demand. Yet growers are fast jettisoning this white gold for substitutes, as they turn sick of its dismal performance.
What happened? Biotechnology – a fancy term for innovation in seed variety through genetic engineering – was same as available to competing nations. The failure, however, turned out to be of regulation, which first allowed the varieties to come in through unofficial channels, and later fail to regulate the propagation of non-viable clones. As local seed companies ran amok, a promising innovation has turned hazardous as patent owners have refused to take ownership of a disaster-in-waiting claiming theft of their intellectual property.
As cotton belt in the country becomes thing of the past, regulatory bodies have stood by as silent spectators. Here one is reminded of a comment by Ali T. Sheikh, ex-CEO Lead Pakistan who noted that the country lacks capacity to build Bhasha even with a blank cheque. Bt. variety introduced in Pakistan were no different than ones adopted globally, yet the hollow regulatory capacity has brought down what has otherwise proven to be a step forward world over.