As a staple agricultural product and an important economic crop after food, cotton plays an important role in China’s social and economic development. The state has been intervening in various degrees in the supply and marketing of cotton, implementing the cotton purchasing and storage system. However, the cotton purchasing and storage system also has something to ponder.
Remarkable positive effect of purchasing and storage policies
First of all, as a raw material type agricultural product, the cotton commodity rate is high, and the cotton planting income is the main source of farmer income in the cotton area. The level of cotton purchase price and its change directly determine the income of cotton farmers. From the perspective of promoting the growth of cotton farmers and stabilizing cotton cultivation, the introduction of a cotton purchasing and storage policy can stabilize the expected income of cotton farmers' cotton crops to a certain extent, increase the enthusiasm for cotton cultivation, and stabilize cotton production.
Second, the purchasing and storage system is conducive to the stability of cotton prices. The increase in cotton prices in China has lagged behind grain, and the cotton acreage has continued to shrink. If there was no national reserve cotton policy in 2008, with the current price trend, the cotton acreage and cotton production in 2009 may decline drastically. China's agricultural production and textile industry production have adverse effects.
Again, as the main raw material for the textile and garment industry, cotton accounts for more than 50% of the total cost of the cotton spinning business. Stable cotton supply is the basis for ensuring the healthy and sustainable development of China's textile and garment industry.
Facing severe challenges
The cotton purchasing and storage system implemented in China also faces a very severe test.
The ups and downs of cotton prices in 2010-2011 and the low profits of cotton seeding have seriously affected the enthusiasm of cotton farmers. If the enthusiasm of the cotton growers continue to decline, the contradiction between the supply and demand of cotton will be aggravated and the development of the cotton industry in China will be affected.
Affected by many factors such as the ups and downs of cotton prices in 2010-2011, rising labor costs, and appreciation of ***, China's cotton textile industry has also experienced difficulties in its development.
The high price of cotton led to a sharp rise in production costs, and the profit margin was greatly compressed. Export companies did not dare to accept large orders or long orders. Some small and medium-sized cotton textile enterprises could not digest the increased costs due to raw material prices due to low inventory and insufficient funds. , forced to stop production.
Reflections on the future cotton purchasing and storage system
For the current China's cotton purchasing and storage system, there are many foreign experiences that can be used for reference.
The policy of China's purchase and storage is based on the minimum protection price, a measure of protection for farmers' interests and the cotton industry, and foreign cotton protection policies are basically aimed directly at cotton farmers through a combination of direct subsidies and price intervention policies. China may try to establish a cotton price protection model that combines the cotton purchasing and storage policy with the target price policy for cotton farmers. Actively create conditions to implement the cotton target price policy, directly subsidize farmers and protect cotton farmers' production enthusiasm.
From the current situation in China, we can consider choosing Xinjiang to implement the cotton target price policy pilot, and then promote it to other cotton regions in the country after maturity. The government determines the target price of seed cotton every year, the state purchases at this price, or farmers sell cotton according to the market price. Then according to the difference between the target price and the market price and the average yield per unit, the subsidy amount per mu is determined and distributed directly to the farmers before the annual spring plowing. .
China is a big country for cotton imports. In recent years, China's domestic cotton supply and demand gap has increased, and the volume of imported cotton has continued to increase. As China's dependence on imported cotton becomes stronger, it is necessary to gradually establish a purchasing and storage mechanism for imported cotton. Although the collection and storage of domestic cotton can adjust the balance of supply and demand in the market, which is conducive to the stability of cotton prices, but in the long run, the collection and storage of domestic cotton will also disrupt the market supply and demand, resulting in resource constraints. Appropriate collection and storage of cotton can increase China's cotton resources reserve, and it will not cause much interference to domestic supply. It can also use the advantage that international cotton price is lower than domestic cotton price to reduce storage and storage costs.
In addition, the regulation of cotton reserves can take quantitative control and price control in two ways. Quantitative regulation clarifies the amount of storage and storage, can directly guide the flow of cotton resources, and control methods are relatively straightforward. The price regulation stipulates the purchase and storage price, and there is no limit on the amount of storage and storage. The adjustment of the allocation of cotton resources through price leverage is an indirect regulation method. The previous collection and storage of cotton have adopted quantitative control methods. This time, the temporary collection and storage has adopted price control methods. In actual practice, it is recommended that the government adopt a flexible regulation method according to the cotton market situation, which can be used in a variety of control methods to promote the effective operation of the cotton market.
Remarkable positive effect of purchasing and storage policies
First of all, as a raw material type agricultural product, the cotton commodity rate is high, and the cotton planting income is the main source of farmer income in the cotton area. The level of cotton purchase price and its change directly determine the income of cotton farmers. From the perspective of promoting the growth of cotton farmers and stabilizing cotton cultivation, the introduction of a cotton purchasing and storage policy can stabilize the expected income of cotton farmers' cotton crops to a certain extent, increase the enthusiasm for cotton cultivation, and stabilize cotton production.
Second, the purchasing and storage system is conducive to the stability of cotton prices. The increase in cotton prices in China has lagged behind grain, and the cotton acreage has continued to shrink. If there was no national reserve cotton policy in 2008, with the current price trend, the cotton acreage and cotton production in 2009 may decline drastically. China's agricultural production and textile industry production have adverse effects.
Again, as the main raw material for the textile and garment industry, cotton accounts for more than 50% of the total cost of the cotton spinning business. Stable cotton supply is the basis for ensuring the healthy and sustainable development of China's textile and garment industry.
Facing severe challenges
The cotton purchasing and storage system implemented in China also faces a very severe test.
The ups and downs of cotton prices in 2010-2011 and the low profits of cotton seeding have seriously affected the enthusiasm of cotton farmers. If the enthusiasm of the cotton growers continue to decline, the contradiction between the supply and demand of cotton will be aggravated and the development of the cotton industry in China will be affected.
Affected by many factors such as the ups and downs of cotton prices in 2010-2011, rising labor costs, and appreciation of ***, China's cotton textile industry has also experienced difficulties in its development.
The high price of cotton led to a sharp rise in production costs, and the profit margin was greatly compressed. Export companies did not dare to accept large orders or long orders. Some small and medium-sized cotton textile enterprises could not digest the increased costs due to raw material prices due to low inventory and insufficient funds. , forced to stop production.
Reflections on the future cotton purchasing and storage system
For the current China's cotton purchasing and storage system, there are many foreign experiences that can be used for reference.
The policy of China's purchase and storage is based on the minimum protection price, a measure of protection for farmers' interests and the cotton industry, and foreign cotton protection policies are basically aimed directly at cotton farmers through a combination of direct subsidies and price intervention policies. China may try to establish a cotton price protection model that combines the cotton purchasing and storage policy with the target price policy for cotton farmers. Actively create conditions to implement the cotton target price policy, directly subsidize farmers and protect cotton farmers' production enthusiasm.
From the current situation in China, we can consider choosing Xinjiang to implement the cotton target price policy pilot, and then promote it to other cotton regions in the country after maturity. The government determines the target price of seed cotton every year, the state purchases at this price, or farmers sell cotton according to the market price. Then according to the difference between the target price and the market price and the average yield per unit, the subsidy amount per mu is determined and distributed directly to the farmers before the annual spring plowing. .
China is a big country for cotton imports. In recent years, China's domestic cotton supply and demand gap has increased, and the volume of imported cotton has continued to increase. As China's dependence on imported cotton becomes stronger, it is necessary to gradually establish a purchasing and storage mechanism for imported cotton. Although the collection and storage of domestic cotton can adjust the balance of supply and demand in the market, which is conducive to the stability of cotton prices, but in the long run, the collection and storage of domestic cotton will also disrupt the market supply and demand, resulting in resource constraints. Appropriate collection and storage of cotton can increase China's cotton resources reserve, and it will not cause much interference to domestic supply. It can also use the advantage that international cotton price is lower than domestic cotton price to reduce storage and storage costs.
In addition, the regulation of cotton reserves can take quantitative control and price control in two ways. Quantitative regulation clarifies the amount of storage and storage, can directly guide the flow of cotton resources, and control methods are relatively straightforward. The price regulation stipulates the purchase and storage price, and there is no limit on the amount of storage and storage. The adjustment of the allocation of cotton resources through price leverage is an indirect regulation method. The previous collection and storage of cotton have adopted quantitative control methods. This time, the temporary collection and storage has adopted price control methods. In actual practice, it is recommended that the government adopt a flexible regulation method according to the cotton market situation, which can be used in a variety of control methods to promote the effective operation of the cotton market.
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