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Domestic Cotton Policy RE Market Focus Adjustment Needs To Respect "Invisible Hand".

2013/7/22 14:02:00 32

Cotton Policy Cotton Subsidy System Cotton Price

domestic a href= "//www.sjfzxm.com/news/index_c.asp" > cotton policy < /a > became the focus of the market again: in mid June, the national development and Reform Commission convened the relevant cotton research departments to study the adjustment of cotton purchase and storage policy. The call for textile enterprises to replace the current policy of storage and storage with direct supplement of cotton is becoming more and more high. According to the characteristics of domestic cotton planting and marketing, the cotton policy includes cotton import and export policy, cotton import quota policy, cotton planting and spanportation subsidy policy. 
The United States is the largest exporter of cotton in the world. Under the protection of the complete cotton subsidy mechanism, the US cotton industry has always had very high P competitiveness. According to the current agricultural bill of the United States, the Cotton Subsidy System in the United States has a relevant guarantee system for cotton production, sale and trade. First of all, production links include direct subsidies and counter cyclical subsidies, mainly cotton farmers as subsidies. The subsidy rate of direct subsidies is 6.67 cents / pound, covering 85% of the basal planting area. In countercyclical subsidies, the target price of cotton is 71.25 cents / pound, when the market effective price is lower than the target price, the difference between direct payment and target price is 71.25 cents / pound. Secondly, in the sales link, the US government provided the growers with mortgage free recourse loans (CCC loans) through the agricultural Commodity Credit Corporation. The cotton growers could use the cotton that had not been harvested as collateral to obtain a loan from the credit company. If the monitored world adjusted price (AWP) was lower than the benchmark price of the loan (52 cents / lb of the upland cotton), the grower could mortgage the credit company to the credit company on the basis of the loan benchmark price. If it was not redeemed on time, it would be auctioned by the United States Department of agriculture, and the growers would not have to worry about the difficulty of selling cotton. Third, in the trade link, when the US cotton price is higher than the international cotton price, the United States can also use special provisions (step1 reduce the benchmark price of loans, Step3 increase imports, stabilize domestic cotton prices) to ensure the competitiveness of US cotton trade. 
 but the US < a href= "//www.sjfzxm.com/news/index_x.asp" > Cotton Subsidy System < /a > is not applicable in China. There are three reasons: first, the United States has cultivated more than 60 million acres of cotton fields in large farms, and has less than 30 thousand farmers. Farmers have a very high voice in terms of sales, consumption and even participation in politics. In addition to the Xinjiang corps, cotton cultivation in China is still dominated by smallholder farming. The average cotton planting area per capita is less than that of the US 1/10, which not only weakens the right to speak downstream, but also increases the difficulty of direct subsidies to households. Second, the high degree of mechanization and controllable cost of cotton planting in the United States. China's cotton cultivation is time-consuming, especially in harvesting. It is still mainly manual picking. Even though the yield of cotton is relatively stable, the opportunity cost of time is high, so it is difficult to attract young rural labor force. Thirdly, the position and commitment of developing countries and developed countries in agricultural subsidies are different. China promises that agricultural products will follow the principle of micro subsidy, while the US cotton subsidy is far beyond the category of "micro", and only promises to gradually reduce the scale of subsidies. 
 to sum up, cotton direct subsidy may not be able to achieve the desired results in terms of enforcement, subsidies and final objectives. In the era of "post purchase and storage", the cotton policy may adopt a way of "limited collection and storage" instead of "open purchase and storage" and a direct subsidy policy in conditional areas (mainly Xinjiang). Promote the development of cotton planting industrialization, and ultimately realize the development of cotton industry to mechanization, marketization and scale, and gradually improve the long-term mechanism of cotton policy. 
 in order to ensure the smooth spanition of "a href=" //www.sjfzxm.com/news/index_s.asp "> cotton price < /a > in the era of" post purchase and storage ", it is expected that the national cotton store will gradually achieve" de Stocking "in the next three years or even longer, but it will still maintain more than 50% of the inventory consumption ratio. Under the environment of gradual marketization, the cotton futures market will revive in order to avoid risks and enhance market influence.