The No. 1 Central Document is issued to set the tone for future cotton target price reform
Abstract: With the promulgation of “Several Opinions of the Central Committee of the Communist Party of China and the State Council on Deeply Promoting Agricultural Supply-side Structural Reform and Accelerating the Cultivation of New Motive Forces for Agricultural and Rural Development” (No. 1 Central Document), the industry has expressed high concern for the statement on cotton issues in the document. focus on. After the expiration of the three-year trial period of Xinjiang’s cotton target price reform, the future policy direction has become the focus of attention. At a press conference held by the State Council Information Office on February 6, the Central Rural Work Leading Group
With the announcement of the CPC Central Committee and the State Council on further promoting agricultural supply Several Opinions on Accelerating Structural Reform and Cultivating New Momentum for Agricultural and Rural Development”(The promulgation of the Central Document No. 1) Statements on the cotton issue expressed a high level of concern. After the expiration of the three-year trial period of Xinjiang’s cotton target price reform, the future policy direction has become the focus of attention.
News held at the State Council Information Office on February 6 At the press conference, Han Jun, deputy director of the Office of the Central Rural Work Leading Group, interpreted the document’s content on the price formation mechanism of agricultural products.
Han Jun said that the reform of the price formation mechanism and purchase and storage system of key agricultural products is the highlight of promoting the structural reform of the agricultural supply side. Regarding the cancellation of the temporary cotton purchase and storage policy and the implementation of a pilot cotton target price reform in Xinjiang, he commented that “important progress has been made.”
Regarding the direction of reform in the future, he said, “We must adhere to the market orientation and protect the interests of farmers. In terms of the pace of implementation, we must adhere to variety-based policies and gradual advancement.”
The No. 1 document clearly states: “Deepen the reform of the price formation mechanism and purchase and storage system of important agricultural products such as grain.” Regarding the content of the reform, the document emphasizes “adjustment and improvement of the Xinjiang cotton target price policy, Improve subsidy methods.” According to industry insiders, Xinjiang’s cotton target price reform will continue to be implemented. As for how to “adjust and improve”, relevant departments are now studying the formulation of further policy plans.
According to reports from all parties in the cotton industry chain, the pilot policy has achieved good results in the three years since its implementation. This is mainly reflected in the basic establishment of the market price mechanism, the market awareness of market entities has been significantly enhanced, farmers’ interests have been protected to a certain extent, the efficiency of financial subsidies has been improved, and the price difference between domestic and foreign cotton is gradually narrowing.
Zhu Beina, president of the China Cotton Textile Industry Association, also said: “Judging from the evaluation results of Xinjiang’s cotton direct subsidy work, the cotton price reform pilot has achieved remarkable results, and cotton prices are basically determined by market supply and demand. ”
Industry experts said that the three-year price subsidy pilot also has some problems that cannot be ignored. From a national level, the subsidy amount exceeds my country’s WTO commitments. According toWTOrules, the target price subsidies implemented in our country are “yellow box subsidies”, and the amount of subsidies is subject to the upper limit of the de minimis allowance. Judging from the three-year pilot situation, the subsidy amount of the cotton target price subsidy pilot policy is constrained by the subsidy upper limit. If no adjustments are made in the future, it is likely to raise questions from other member countries and lead to trade disputes.
Judging from the subsidy price, the standard for setting the target price is unclear and changes too frequently. The setting of the cotton target price in the past three years has not been determined entirely in accordance with the “production cost+basic income” designed by the policy. There are often factors of competition among different departments and different stakeholders. Due to the different interest demands of different entities and departments, inconsistent policy views, and different understandings of industrial development, the differences in opinions among all parties are increasing, making it increasingly difficult to set target prices. This also leads to market uncertainty.
Due to unstable policy expectations, all parties in the cotton market have no idea of their future expectations.
For textile companies, the most important concern is cotton quality. Judging from the results of the pilot program over the past three years, since subsidies are basically based on the actual sales volume of growers, the overall quality of cotton has shown a downward trend. “Foreign goods enter the market and domestic goods enter the warehouse.” There is a shortage of high-grade cotton and a surplus of low-grade cotton. This is the current situation.The current status of my country’s cotton industry. The decline in raw material quality has directly affected the international competitiveness of my country’s textile industry. Textile enterprises believe that the current supply of cotton resources has improved significantly compared with the previous two years, but there is still a gap between the expectations of enterprises. Enterprises are particularly concerned about “where to buy good cotton.”
In the final analysis, the cotton target price reform is a supply-side structural reform. LastMarch, General Secretary Xi Jinping clearly pointed out that under the new situation, the main contradiction in agriculture has transformed from insufficient total production to structural contradictions, mainly manifested in phased Oversupply and undersupply coexist. Promoting the structural reform of the agricultural supply side and improving the comprehensive efficiency and competitiveness of agriculture are the main directions for the reform and improvement of my country’s agricultural policies at present and in the future.
General Secretary Xi’s speech is precisely the central government’s theme of promoting the structural reform of the agricultural supply side as2017’s No. 1 Central Document reason.
Tang Renjian, deputy leader of the Central Rural Work Leading Group and director of the office, said when interpreting the No. 1 document that the main direction of promoting the structural reform of the agricultural supply side is to improve the quality of agricultural supply. We must be market-oriented, optimize the supply structure, and keep up with the pace of upgrading consumer demand. We must adhere to quality-based agriculture development, accelerate agricultural science and technology progress, and improve agricultural comprehensive benefits and competitiveness. The fundamental way is to deepen reforms. It is necessary to activate the potential of resource factors through institutional reform and mechanism innovation, and cultivate new driving forces for agricultural and rural development.
According to the reporter’s understanding, the China Cotton Textile Industry Association took the lead in convening a meeting last year to evaluate the effects of the Xinjiang cotton price reform pilot. Experts in the agriculture, business, and circulation fields who participated in the meeting reviewed Xinjiang’s cotton goals. We have conducted internal communications on issues since the pilot reform policy.
All parties are generally satisfied with the results of the pilot and hope that the reform policy will continue to be implemented. At the same time, it is recommended that the “yellow box subsidy” policy linked to output be abandoned and the “blue box subsidy” policy not linked to current output be adopted. box policy”.
Regarding cotton quality issues, experts recommend high quality and superior supplements. However, an official from the National Development and Reform Commission said that quality issues still need to be solved through marketization. Zhu Beina, president of the China Cotton Textile Industry Association, also said at a meeting that “the Xinjiang reform pilot policy still needs to be further improved, including high quality and low prices, establishing a long-term mechanism to stabilize the market, improving the real subsidy effect, and taking into account domestic and foreign markets.”
The price reform of agricultural products including cotton is gradually entering the deep water area, and there is no turning back, The issuance of document No. 1 points out the direction for future reform of the cotton price system.
“The reform policy will definitely continue, but how it will be changed is still unknown. The decision-making power of policy introduction lies with the government, which should ultimately be the result of the game between various stakeholders.” said an insider in the industry. explain.
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Central Document No. 1 is released to set the tone for future cotton target price reform
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