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    Cotton Target Price Reform Pilot 1St Anniversary: The Cotton Market Is Not Yet Decided.

    2015/9/16 11:59:00 41

    CottonTarget PriceXinjiangListingSeed CottonTextilesNortheast

    In April 2014, it has been implemented for 3 years.

    cotton

    The policy of purchasing and storage was cancelled; in September of that year, the pilot work of cotton target price reform was officially carried out.

    Xinjiang

    The autonomous region began.

    Today, it is just one year after the pilot of target price reform.

    At the outset, the pilot project of target price reform was carried out with the aim of giving full play to the decisive role of the market in the allocation of resources under the premise of protecting the interests of farmers, and deciding the price formation to be determined by the market so as to promote the coordinated development of the upstream and downstream industries.

    After a year, what is the specific effect? It is understood that the progress of Xinjiang's cotton target price reform pilot is in line with expectations. However, as the policy is in the pilot stage, its effect needs to be further tested and implemented.

    "Double down" trend is obvious

    In 2011, the cotton temporary storage and storage policy was formulated for the "fire fighting" in the cotton market. In 2012, the new cotton reserves exceeded the government's expectations and appeared "burst watches".

    Meanwhile, cotton planting households are beginning to expand their planting area endlessly.

    Just in those days, domestic cotton prices fell by 20%, while cotton prices in the international market fell by 42% during the same period, which led to the expansion of new cotton purchase and storage prices and market spreads in 2012, and a large number of new cotton poured into the Treasury.

    At that time, some media reported that the downward trend of cotton prices in 2012 was unexpected, suggesting that the design of cotton temporary purchase and storage policy was completely wrong.

    Cheng Guoqiang, a researcher at the State Council Development Research Center, said that during the three years of cotton temporary storage and storage, the cotton market has been stable, but it has also been embarrassed by the continuous decline of cotton quality and the loss of cotton spinning industry.

    In June 25, 2014, the Executive Council of the State Council clearly pointed out that under the premise of protecting the interests of farmers, the policy of minimum purchase price, temporary purchase and storage and agricultural subsidies should be promoted gradually to the target price system of agricultural products.

    A year after the pilot in Xinjiang, although the cotton planting area in Xinjiang increased by 2.7% over the previous year in 2014, it was 5.1% lower than the previous year.

    "Cotton farmers in the Yangtze River Valley and the Huang Huai Valley, in particular, took a wait-and-see attitude in 2014."

    Qin Fu, a researcher at the Agricultural Economics Institute of Chinese Academy of Agricultural Sciences, said that the downward trend of both area and price is very obvious.

    Zhao Xinmin, deputy director of the cotton economics research center of Shihezi University, Xinjiang, said that China's cotton growing industry has shifted from the mainland to the northwest. Among them, the western cotton producing area represented by Xinjiang has been growing rapidly every year, and has become the most important area for the future development of cotton in China.

    Qin Fu team research results show that cotton target price subsidy policy in 2014 only in Xinjiang, the mainland cotton area canceled 3 consecutive years of cotton temporary purchase and storage policy, cotton production in the mainland cotton production decline, cotton planting area will be greatly reduced.

    In addition, cotton in 2014

    list

    At the beginning, the prices at home and abroad were down and the cost line of cotton farmers fell.

    Xinjiang

    Unginned cotton

    The opening price is about 5.5 yuan per kilogram, and the lint per ton is below 17000 yuan per ton.

    According to the September International Cotton Advisory Committee (ICAC), global cotton output exceeded consumption in fifth consecutive years in 2014 /2015, and the end of the world cotton inventory is expected to reach 22 million 250 thousand tons.

    Qin Fu team believes that after the target price level is released, based on the analysis of the domestic economic situation and the global cotton supply and demand situation, the processing enterprises predict that cotton prices may drop to 15000~16000 yuan per ton in 2014.

    Who will benefit more?

    Under the current situation, who will benefit more from the pilot project of cotton target price reform is the focus of attention.

    In recent years, due to the low efficiency of cotton planting, the planting area of the cotton growing areas in the mainland has been decreasing year by year. After the temporary storage and withdrawal policy has been delisted, it means that the comparative benefits will be further reduced, and cotton farmers have indicated that they will not grow cotton next year.

    It is understood that 9 cotton provinces in the mainland have not yet implemented this reform. At present, only 2000 yuan per ton of lint is subsidized.

    Whether the cotton target price reform will be implemented in the cotton area of the mainland, the industry experts agree that the possibility is not great.

    Yang Wenying, Yang Jia village, Liu Bao Town, Wudi County, Shandong Province, has been planting an average of 300 mu of cotton per year since 2003.

    "Good year, net profit can reach more than 160 thousand yuan.

    But once the purchase and storage policy is cancelled, I am concerned that prices will fall sharply. If that happens, I will grow less.

    At present, in the pilot stage, the target price level is determined by the method of production cost plus basic income. One of the reasons is that it is beneficial to play the role of market mechanism.

    However, market activities are natural risks. Farmers are the main body of the market economy, while gaining profits through the market, they must also bear the risk of market fluctuations.

    "The target price only ensures that farmers get basic income instead of all proceeds. When the market price falls, farmers also have to bear some risk of falling profits."

    Qin Fu explained.

    The policy affects more than cotton farmers.

    "The impact of the new deal on the circulation enterprises is obvious."

    Zhao Xinmin said that they will directly face the market, find buyers themselves, and increase operational risks.

    It is understood that some large buyout companies dare not take part in the acquisition in 2014, but are willing to undertake the task of pferring and storing Xinjiang cotton.

    At the beginning of the cotton market in Xinjiang in 2014, there was a general phenomenon that the purchasing amount of processing enterprises declined sharply and some cotton farmers were paid cash.

    The processing enterprises in the cotton growing areas in the mainland are facing difficulties in processing equipment and how to turn them into production.

    Meanwhile,

    Spin

    Enterprises generally welcome target price subsidy policy.

    When the temporary storage policy is implemented, spot resources are basically in the hands of the government. It is difficult to get cheap raw materials and import quota restrictions. Enterprises are hard to manage, and the operating rate is less than 50%.

    "After the implementation of the target price subsidy policy, the price of the cotton market will drop sharply, which will reduce the acquisition cost, because it can get cheaper raw materials from a broader market."

    An enterprise official said.

    Subsidies can't keep up with loans.

    It is reported that in 2014, there are three forms of pilot projects in Xinjiang autonomous region, which are based on area, output and 60% area +40% output.

    Among them, the subsidy standard for the area is 267.63 yuan per mu, and the subsidy standard for seed cotton paction is 0.688 yuan per kilogram, 0.893 yuan for special cotton, and 1.533 yuan per kilogram for Xinhe County, which is entirely subsidized according to output, and 478.06 yuan per mu for the average area in kping County, which is fully subsidized by area.

    The Qin Fu team learned from the survey that at present, subsidized production is conducive to mobilizing the enthusiasm of cotton producers, reducing the cost of policy implementation and speeding up the adjustment of industrial structure.

    "But we need to pay attention to the sub cotton area, the risk cotton area, the fruit cotton intercropping cotton area, the cotton area with less per capita area, the seed cotton yield is low, and the subsidy by area is also necessary."

    In terms of area recognition, due to historical reasons, the area data of the National Bureau of statistics is smaller than the area data verified by the Xinjiang autonomous region, which has led to the dilution of subsidies, which has increased regional instability factors and the difficulty of interpretation by the basic level departments.

    In addition, Qin Fu team found that 80% to 95% of cotton farmers and bean farmers in the pilot area mainly rely on loans for agricultural production. The loan period was basically from January to December of that year. The former repayment credit became the decisive factor for the smooth access to the next year's loan. Farmers also paid special attention to loans before the end of December.

    Xinjiang Sha Ya county is a big county of cotton planting in China. The newly developed farm machinery farm cooperative farmer, the new farming farm in Sha Ya county, Akesu area, has planted 600 mu of cotton in 2014. "Subsidies are certain, sooner or later, we can get our hands, but the results are quite different."

    This is because most cotton growers invest heavily, and most growers rely on loans. Before the pilot, no matter how much they sell, they are selling the money now, and they will be able to repay the loan in time, and then get the new loan, so that they can buy relatively cheap chemical fertilizer and other agricultural machinery products. Until the beginning of spring, the next year's planting will not be affected.

    "In 2014, we can only get 6.2 yuan per kilogram, which is not enough for the basic operation cost, and the loan is definitely not yet."

    Da Ke said.

    The visible hand must be covered.

    In the rush hour of cotton market, it is easy for brokers, purchasers to press down or even sell them without buying, especially farmers who have short storage period.

    The Qin Fu team suggested that a contingency plan for the bottom should be worked out, and the central storage cotton and grain reserves should be sold at the beginning of the cotton and soybean market and when they were concentrated on the market.

    Dang Guoying, a researcher at the Rural Development Research Institute of the Chinese Academy of Social Sciences, said that it is necessary to integrate various departments' strength to provide supporting services for them, such as strengthening the construction of water conservancy facilities and the construction of ploughing roads, so as to provide necessary infrastructure conditions for cotton farmers to replant other crops.

    "We also need to provide market guidance and technical training for cotton growers to prevent cotton farmers from" swarming up "to a certain crop, which will lead to oversupply and finally harm the farmers.

    Party Guo Ying added.

    In 2015, the first document proposed to sum up the pilot experience of Xinjiang cotton, northeast and Inner Mongolia soybean target price reform, improve subsidies, reduce operating costs, and ensure timely subsidies to farmers.

    However, the main body of agricultural production and operation in China is numerous. Any new policy needs an adaptation process. "Policy is not easy to change too frequently, but it needs continuity and stability."

    Qin Fu said that in the future, we should focus on improving subsidies, reducing operating costs and improving efficiency of subsidies, and continue to push forward the reform of target prices.

    In an in-depth investigation, Qin Fu's team learned that the US counter cyclical payment may be of reference to China's target price reform.

    Counter cyclical payment is a new subsidy measure proposed by the US agricultural law in 2002. It is a minimum price guarantee system, which is linked to the market price of that year.

    The total amount of countercyclical subsidies received by farmers is equal to the product of the countercyclical payment rate per unit product and the area of payment and the yield per unit area.

    It is easy to see that counter cyclical payments are linked to the acreage and output of agricultural products.

    In the United States, large subsidies go mainly to a few large farms.

    Qin Fu's team believes that when our country is in the pilot stage, it should also tilt to the new business owners such as large grower, family farm and farmer cooperatives.

    At the same time, the characteristics of batch payment by counter cyclical payment are particularly prominent.

    The subsidy funds will be paid in batches in the pilot area, and a portion will be paid at a certain proportion before harvest, and the rest will be paid after harvest. This will relieve the financial pressure of farmers who have a single planting structure.

    But Qin Fu also said that doing so would increase the difficulty of actual operation.

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