The China Textile Industry Federation And Other Relevant Departments Are Conducting Research On The Direct Subsidy Policy

The Ministry of Finance of China, China Textile Industry Federation and other relevant departments are conducting research on the direct subsidy policy. It is expected to start the pilot program later this year and officially promote it next year.

The report quoted authorities as saying that senior leaders have said that "the current cotton storage policy can no longer be continued". It means that the cotton direct subsidy policy has entered the "pregnancy preparation period", but "how to supplement, how much to supplement, and how to ensure that subsidies are in place" need careful consideration and thorough design, and this breeding process is bound to be complex and arduous.

The report also said that the cotton purchase and storage policy launched in 2011 came into being to protect the interests of cotton farmers against the backdrop of a sharp decline in cotton prices; Today, this policy, which has been implemented for nearly three years, has reached the turning point of "retreat in response to disasters".

The first is the "market robbery", that is, excessive intervention in the purchase and storage policy has led to the weakening of the market mechanism, insufficient supply of high-quality cotton, and the cotton textile enterprises have difficulty in surviving due to the high cost; The second is "gray robbery", that is, there are distorted operations in the implementation of the collection and storage policy and the supporting quota management system for imported cotton, which has spawned gray areas such as revolving cotton and quota scalping; Third, "money robbery", such a huge amount of collection and storage costs huge, daily inventory, warehouse management and other costs are hundreds of millions of losses.

At the beginning of the implementation of the cotton storage policy, it really played a positive role in supporting the city; However, with the continued implementation of the policy, and the increasing breadth of purchase and storage, the market is short of cotton supply, which has not reached the goal of benefiting cotton farmers, but also hurt the business aspirations of textile enterprises.

Gao Yong, Vice President of the China Textile Industry Federation, said: "Only by implementing the direct subsidy policy for cotton farmers can we break the existing dilemma of the cotton industry. At present, the competent authorities are studying the details of the policy, and the next step may be the pilot, which may be promoted a year later. Xinjiang is one of the pilot areas we recommend."

At present, the turnover of reserve cotton is quite quiet. As of July 16, the total cumulative listing volume was 12137004.91 tons, and the total cumulative turnover volume was 2989331.453 tons, accounting for only 24.63% of the total turnover. Gao Yong pointed out that the deposit price was too high, about 19000 yuan/ton, resulting in a light overall deal. The quality of cotton received in the 2012/13 cotton season is too poor, and the recent operating efficiency of textile enterprises is low, and the working capital is insufficient.

Gao Yong also stressed that direct compensation may have drawbacks, which does not mean that direct compensation is the best way. The promotion of direct subsidy is purely for the purpose of breaking through the current cotton system and allowing cotton farmers to receive direct subsidies from the state.

After the realization of direct subsidy, the labor productivity of the cotton industry will ultimately be improved. The current small-scale agricultural cotton planting industry must develop in the direction of large-scale and mechanized production to make China's cotton industry competitive.