Pakistan’s cotton sector, a crucial pillar of the economy, faces multiple challenges, including low yields, climate change, weak government support, and outdated farming techniques, according to a new report by the International Labour Organization (ILO).
The study, titled “Mapping of the Cotton Supply Chain at the Community Level in Pakistan”, examines the cotton industry in Punjab and Sindh, revealing that smallholder farmers, labourers, and businesses along the supply chain do not fully benefit from the industry’s economic gains.
According to Arif Habib Limited, cotton arrivals recorded only 5.51 million bales as of January 31, 2025, marking a 34% year-on-year decline from 8.35 million bales recorded in the same period last year. This sharp decline has been attributed to poor farmer economics, rising costs, and inconsistent government policies.
Punjab, historically the country’s largest cotton-producing province, saw a 36% drop in arrivals, with only 2.7 million bales recorded compared to 4.23 million bales in the previous year. Sindh, which also suffered a 32% decline, produced 2.8 million bales. However, for the first time, Sindh’s cotton arrivals have surpassed those of Punjab, reflecting shifting cultivation patterns and possible long-term structural changes in the sector.
The ILO report highlights how the cotton sector contributes significantly to GDP, generates foreign exchange, and supports the textile industry while providing employment to millions.
However, policies aimed at supporting the sector often fail to address the needs of the most vulnerable farmers and workers. Many small-scale farmers remain reliant on informal credit providers, struggle with a lack of access to modern equipment, and increasingly shift to other crops such as wheat and sugarcane in search of better returns.
Workers in the cotton industry face widespread issues, including inadequate wages, job insecurity, lack of social protection, and unsafe working conditions. The report notes that female workers bear a triple burden of household responsibilities, farm labour, and caregiving, with limited opportunities for training and access to machinery. Additionally, child labour remains prevalent, with many children missing out on education due to farm work.
The study underscores that while policies on subsidies, seed quality, farm machinery, and crop support have contributed to improving production, human resource development in the sector is largely overlooked. Issues such as literacy, education, healthcare access, and community support, particularly for migrant workers and minorities, remain unaddressed. Awareness of workers’ rights, fair wages, and childcare support is also inconsistent, with many farmers and employers failing to implement decent work conditions.
The report further raises concerns over forced labour practices, particularly in cottage industries and power loom units. The widespread use of advance payments through informal lenders often traps workers in exploitative conditions. Forced overtime, intimidation, and threats of retaliation for non-compliance were also observed, with indications of child labour persisting across farming communities.
Despite some improvements in export-oriented textile units, the broader cotton industry continues to grapple with systemic issues that limit fair labour practices and sustainable growth. The ILO urges stronger policy interventions, improved social protections, and greater investment in human infrastructure to safeguard the rights and livelihoods of workers in Pakistan’s cotton supply chain.
