Cotton price reform cotton farmers happy

At the end of November, the early winter was already cold, but in the heart of the cotton farmer Wang Min (a pseudonym) is extremely cold. Although the price given by the buyer was 8 cents higher than Wang Min’s psychological price, Wang Min still felt unsatisfied.

Wang Minxiu’s cotton, which had been in his hand for a month, was eventually sold. "This price may be the highest price now, and it may not be higher." Wang Min comforted himself.

Wang Min, a Henan native who planted many years of cotton, is an authentic farmer. He is not only familiar with the field operation skills of the cotton, but also familiar with the local cotton market, but Wang Min is a bit puzzled about this year's cotton market.

On the one hand, the decline in cotton production, on the other hand, was a drop in cotton prices. This made Wang Min wonder: “When the cotton production was high in previous years, the prices did not fall, but this year's cotton production dropped, and how did the price fall?”

Not only Wang Min, but many other cotton farmers like Wang Min have encountered the same confusion. An important factor behind this is the implementation of the national cotton price reform subsidy policy this year.

Cancel temporary purchases and let cotton prices be priced by the market

The reporter learned that Xinjiang, Shandong, Hebei, Henan, Hunan, Hubei and other major cotton producing areas have entered the cotton harvesting stage. However, due to the impact of bad weather, coupled with the low purchase price of seed cotton has dampened the enthusiasm of cotton farmers for picking, this year our country's cotton production cuts are larger.

However, despite a large reduction in cotton production, the price of cotton has not been boosted. It has been declining since the beginning of the year and has accelerated in the near future.

"This year's production is not as good as in previous years. In previous years, an acre of land could produce about 500 pounds. This year, it only has less than 400 pounds. The price is not as good as it used to be. This year, it can sell 6.8 yuan per kilogram. Not bad. The best time in previous years can be sold. To 8.5 yuan." Wang Min said.

With the approval of the State Council, the National Development and Reform Commission, the Ministry of Finance, and the Ministry of Agriculture jointly issued the 2014 cotton target price on April 5 this year at 19,800 yuan per ton.

The target price policy is an agricultural support policy that protects the interests of producers through differential subsidies based on the market price of agricultural products. When the market price is lower than the target price, the country gives subsidies to producers in the pilot areas based on the difference between the target price and the market price, the planting area, and the amount of sales; when the market price is higher than the target price, the state will not issue subsidies.

This marks the official curtain call for an interim cotton purchase and storage policy that lasts for three years. The state's subsidy for cotton will be changed from “covert” to “clear”, and the government will no longer directly intervene in cotton prices, which are formed by the market.

Although there is a subsidy, but Wang Min’s calculations, “still lose money.” In Wang Min’s heart, he had a doubt that could not be solved. “In the past, the state implemented a cotton purchase and storage policy. Given the low, the cotton direct subsidy policy is now implemented. How can cotton not be sold?"

Under the background of inverting cotton prices inside and outside the country, and cotton reserve stocks rising, this year the state launched a pilot reform of cotton target prices. On the one hand, China must cancel the temporary cotton purchase and storage policy across the country, the price is determined by the market, and on the other hand, Xinjiang cotton. Implement target price subsidies.

According to the Implementation Plan of the Xinjiang Cotton Target Price Reform Pilot Program, the target price is 19,800 yuan per ton and the subsidy mode is 4-6, ie 60% of the central subsidy funds are subsidized according to the actual planting area, and 40% are subsidized according to the actual seed cotton subsidy. .

The implementation of this policy has caused great repercussions in the industry. Most people in the industry believe that this round of the New Deal means that the government no longer directly intervenes in the cotton price, and the domestic cotton price has been determined by the combination of previous storage, storage, and import prices. be broken.

Undoubtedly, the cotton price is determined by the market supply and demand. So what is the supply and demand situation in the cotton market this year? An intermediary broker in Beijing trading in cotton told this reporter that this year's cotton market needs to be known until the end of December, and now cotton in all real estate cotton areas is being put into storage. The national cotton production is expected to be around 6.5 million tons.

When talking about this year's cotton production and market supply, the above-mentioned middlemen said: "This year's output is not high, but this year's market supply is relatively balanced. If the supply surplus is not much more, if there is a supply shortage, it will not be much."

According to media reports, the National Development and Reform Commission recently chaired the second inter-ministerial joint meeting on the pilot reform of the cotton target price reform. The relevant person in charge of the Ministry of Finance of the Ministry of Finance informed the Mainland of the cotton price subsidy policy and related to the central government subsidizing the main cotton producing areas in the Mainland. The issues were explained and the relevant provinces in the Mainland were required to implement the subsidy work.

The subsidies in the Mainland range from Shandong, Hubei, Hunan, Hebei, Jiangsu, Anhui, Henan, Jiangxi, and Gansu to 9 provinces. The annual subsidy standard for 2014 is 2,000 yuan per ton. The subsidy standard for subsequent years is based on 60% of Xinjiang subsidy, and the upper limit Not more than 2,000 yuan per ton.

The reporter also learned that the central government's subsidy to the main producing cotton province is based on the cotton output determined by the National Bureau of Statistics; the subsidy method is decided by the provinces independently, and the subsidy can be selected according to area or by production; the subsidy funds require special account management and closure. Operation and special funds shall not be reserved, occupied or misappropriated, and the subsidies shall be implemented in the hands of cotton farmers.

In addition, the meeting requested all major cotton producing provinces to formulate specific implementation plans as soon as possible, do a good job in basic information statistical monitoring, organize good cotton acquisitions, take effective measures to prevent “circling cotton,” and increase publicity so that farmers can fully understand the subsidy policy.

Our reporter learned from the National Commodity Data Business Association that the introduction of the Xinjiang Cotton Direct Submission Rules took the form of a combination of area and production subsidies, “no lower limit” and no direct support for supporting the relevant policies. The subsidy provides potential transfer space and psychological bottom line, which has the effect of accelerating the decline of cotton prices. Recently, cotton sales have been sluggish. Many companies that purchased high-priced seed cotton in the previous period need to sell hedging through the ** market to give cotton prices. Bring great pressure.

Cotton production "grief", cotton "direct compensation" farmers are not happy

According to the relevant regulations of the country, the upper limit for the subsidy for farmers in Henan is no more than 2,000 yuan per ton, which means that subsidy per kilo does not exceed 2 yuan. "I'm selling more than six but not more than eight. I haven't got a subsidy yet. I don't know when I can get a subsidy," said Wang Min. It is worth noting that cotton prices have fallen to the lowest level in the past four years, and cotton farmers are generally reluctant to sell.

Wang Min told this reporter that once the cotton farmers reluctantly sold in previous years, the processing companies would not be able to sit and they would take the initiative to purchase. Surprisingly, "this year farmers are reluctant to sell at the same time, there are not many processing companies to buy." It is clear that buyers and sellers have entered the game period, and the final cause and goal of the game is still on the price.

Industry sources pointed out that the reason why the “peasants do not want to sell, companies are reluctant to accept” stalemate is because after the cancellation of the temporary cotton purchasing and storage policy, the new cotton prices are entirely determined by the market, and the domestic cotton price should be basically in line with international cotton prices.

The above-mentioned sources also pointed out that under such circumstances, on the one hand, farmers have high planting costs and prices are low, and they naturally do not sell. On the other hand, although domestic cotton prices have fallen, they are still at high prices compared with international cotton prices.

However, apart from the cotton price, what the cotton acquisition companies are most worried about is that the loss of cotton farmers this year is relatively large, and the enthusiasm for planting cotton will be dampened, which may affect the cotton planting area next year.

In the first year of the implementation of the new policy, in the face of this year's downward trend in cotton prices, what should be done for next year? In an interview with this reporter, it was learned that cotton farmers generally wait and see in a stronger mood.

Wang Min said, “No money is already doomed this year, and my hard work is in vain. I’m still waiting to see whether it will be cotton or grain next year. I’m still hesitant. The country’s subsidy can make up for it. We don’t know. ."

Industry analysts believe that the purpose of the target price reform is not only to make the market final say, but also to make both cotton farmers and processing companies profitable, such changes will inevitably change the farmers' traditional production and management concepts, will also change the product pricing method, subsidies Ways, etc. bring a series of changes.

There is a process of adaptation, and therefore reforms also require systemic support measures. Various rules must also be continuously improved in practice.