Cotton Direct Subsidy Policy Pilot Cotton Industry Chain Is Expected To Break Through The Strange Circle

The executive meeting of the State Council, held on the 25 day, carried out the deployment of grain storage and storage facilities and the construction of warehousing facilities, and decided to improve the prices of agricultural products. market Regulation mechanism. The meeting decided that under the premise of protecting the interests of farmers, the policy of minimum purchase price, temporary purchase and storage and agricultural subsidy should be promoted gradually to the target price system of agricultural products. Starting from soybeans and cotton, the pilot scheme of subsidies should be carried out according to varieties. When the market price of products is lower than the target price, the farmers should be subsidized to ensure the basic income of farmers. When the market price of the products increases, the overall price level will rise too fast, the low-income groups will be subsidized to ensure the basic livelihood of the people.

Industry insiders say that this is the important content of the target price system of agricultural products currently advancing. Because of the characteristics of its direct subsidy, the industry also calls it "direct subsidy" policy. It is totally different from the previous "temporary acquisition", which will drive the price of cotton and soybeans to market. The latest news from our reporter shows that the cotton subsidy policy rules will soon be available.

　 Direct subsidy policy rules or accelerate the introduction

This year's "Central Document No. 1" proposes that it will explore and promote the reform of the price formation mechanism of agricultural products and the decoupling of government subsidies, and gradually establish the target price system of agricultural products, and explicitly calls for the pilot of the target price subsidy of soybean and Xinjiang cotton in Northeast and Inner Mongolia this year.

Accordingly, Direct subsidy policy Accelerate. Recently, the national development and Reform Commission, the Ministry of Finance and the Ministry of agriculture jointly issued a notice to launch the pilot project of cotton target price reform in Xinjiang and the pilot of soybean target price reform in Northeast and Inner Mongolia.

According to the relevant processes, the specific subsidies and distribution methods are formulated and released to the public in the pilot areas. Relevant areas are formulating specific implementation measures.

The reporter learned from a person familiar with the matter. Recently, a research team jointly led by the national development and Reform Commission, the Ministry of Finance and the Ministry of agriculture has gone deep into the cotton production base in Xinjiang, and listened to the opinions of industry experts on the policy of direct subsidy. Cotton policy will soon be published, and the policy of soybean direct subsidy is expected to be released before the autumn harvest.

COFCO futures analyst Zhang Li told reporters that the State Council executive meeting on the direct subsidy policy statement and previous wording are basically the same, but no doubt will accelerate the direct subsidy policy details released.

The market is also full of expectations for the specific details of the rules. Liu Yi, an agricultural product analyst at MEIKO futures, told reporters that it is recommended to clarify some problems in the rules, such as direct subsidy to what principle, whether planting area or output; whether the target price is the price of lint cotton or the price of seed cotton instead of leather cotton; whether some key cotton areas in the inland provinces can be included in the subsidy scope. "If the state only subsidize the Xinjiang cotton region and the mainland provinces are not subsidized, the cotton farmers' income in the inland provinces will decline, which will directly lead to a decline in cotton planting area."

The price difference between soybean and cotton is expected to return to normal.

In 2008 and 2011, China started the temporary purchase and storage in the soybean and cotton fields. The industry calls this policy a "market support" policy.

"The price difference between inside and outside caused by Tuo city is too large, resulting in high import volume. Enterprises that can not import low price cotton can only reduce production, resulting in domestic consumption in the past 3 years. The direct subsidy policy is generated under this background. Zhang Liru told reporters.

Once the direct subsidy policy is officially launched, the national temporary purchase and storage policy will be abolished before implementation. According to market participants, if there is a direct subsidy policy, no matter cotton or soybean will be more marketable, the price will be regulated by the market.

At the same time, the direct subsidy policy will also protect the enthusiasm of farmers while lowering the center of gravity of domestic prices to achieve a state of convergence with international prices.

At present, soybeans, cotton The industrial chain of other agricultural products is increasingly entering a strange circle: the state reserve inventory grows year by year, and domestic prices are much higher than international prices. Enterprises are unable to bear the burden of cost and rely heavily on imports to seek raw materials from overseas. As a result, domestic inventories can not digest, but imported goods are flooding the domestic market. Direct subsidy policy will change this pattern.