2016 Cotton Subsidy Rules Released How Much Impact Will Cotton Farmers Have?
Abstract: On October 28, 2016, with the approval of the state, the autonomous region officially issued the “Notice on Issuing the Implementation Plan for the 2016 Xinjiang Uygur Autonomous Region Cotton Target Price Reform Pilot Work.” 2016 is the third year that Xinjiang’s cotton target price subsidy rules have been implemented. After two consecutive years of downturn, cotton prices finally rebounded strongly in April this year, with both futures and spot prices soaring. Prices are rising in the market
Key words:
On October 28, 2016, with the approval of the state, the autonomous region officially issued the “Issuing the Implementation Plan for the 2016 Xinjiang Uygur Autonomous Region Cotton Target Price Reform Pilot Work announcement of”. 2016 is the third year that Xinjiang’s cotton target price subsidy rules have been implemented. After two consecutive years of downturn, cotton prices finally rebounded strongly in April this year, with both futures and spot prices soaring. While market prices are rising, Xinjiang’s cotton target subsidy price has continued to fall, from 19,800 yuan/ton in 2014 to 18,600 yuan/ton in 2016. The result of this increase and decrease will undoubtedly reduce the amount of national subsidies. Compared with the previous two years, will the total income of cotton farmers in 2016 decrease?
It is reported that in 2014, local cotton subsidies in Xinjiang were calculated according to the method of “60% area + 40% output”, of which the area subsidy was 267.63 yuan per mu and the output subsidy was 0.688 yuan/kg. According to calculations by relevant agencies, the average subsidy amount received by Xinjiang cotton farmers per mu in 2014 was 444.39 yuan. If the total cost of cotton planting is deducted, cotton farmers’ income and expenditure are basically the same, or even slightly profitable.
In 2015, according to statistics from the Price and Cost Supervision and Examination Bureau of the Development and Reform Commission of the Xinjiang Autonomous Region, the average cost of cotton per mu in Xinjiang in 2015 was 2,119.55 yuan, of which the production cost was 1,747.84 yuan and the land cost was 371.39 yuan. In 2015, 90% of Xinjiang’s cotton was subsidized based on output, and the remaining 10% was subsidized by area in the four prefectures of southern Xinjiang (Hotian, Aksu, Kashgar, and Kezhou). In 2015, the purchase price of Xinjiang seed cotton was basically 5.3-5.8 yuan/kg. After the subsidies were issued, the price sold by cotton farmers was equivalent to 7.29-7.79 yuan/kg. According to calculations, due to the sluggish cotton production situation in 2015, if cotton is grown on their own land, plus subsidies (temporarily calculated as an average of 500 yuan/mu), cotton farmers should have a profit of more than 200 yuan/mu.
In 2016, Xinjiang local government still provided 90% subsidies based on output and 10% subsidies based on area (limited to the four prefectures in southern Xinjiang). The target price of cotton in 2016 is 18,600 yuan per ton, which is 500 yuan per ton less than in 2015. Calculated based on a yield of 300 kilograms of seed cotton per mu, after the target price subsidy is issued in 2016, the average selling price of seed cotton by cotton farmers is expected to be 7.44 yuan/kg, which is the same as that in 2015. Compared with 2015, the fluctuation range was around 0.2 yuan/kg, which did not have a significant impact on the income of cotton farmers.
From this point of view, although the target price subsidy amount has been reduced this year, it has not had much impact on the income of cotton farmers. Xinjiang’s cotton target price has played a positive role in ensuring cotton farmers’ income from cotton planting and stabilizing Xinjiang’s cotton planting area.
AAA
On October 28, 2016, with the approval of the state, the autonomous region officially issued the “Issuing the Implementation Plan for the 2016 Xinjiang Uygur Autonomous Region Cotton Target Price Reform Pilot Work announcement of”. 2016 is the third year that Xinjiang’s cotton target price subsidy rules have been implemented. After two consecutive years of downturn, cotton prices finally rebounded strongly in April this year, with both futures and spot prices soaring. While market prices are rising, Xinjiang’s cotton target subsidy price has continued to fall, from 19,800 yuan/ton in 2014 to 18,600 yuan/ton in 2016. The result of this increase and decrease will undoubtedly reduce the amount of national subsidies. Compared with the previous two years, will the total income of cotton farmers in 2016 decrease?
It is reported that in 2014, local cotton subsidies in Xinjiang were calculated according to the method of “60% area + 40% output”, of which the area subsidy was 267.63 yuan per mu and the output subsidy was 0.688 yuan/kg. According to calculations by relevant agencies, the average subsidy amount received by Xinjiang cotton farmers per mu in 2014 was 444.39 yuan. If the total cost of cotton planting is deducted, cotton farmers’ income and expenditure are basically the same, or even slightly profitable.
In 2015, according to statistics from the Price and Cost Supervision and Examination Bureau of the Development and Reform Commission of the Xinjiang Autonomous Region, the average cost of cotton per mu in Xinjiang in 2015 was 2,119.55 yuan, of which the production cost was 1,747.84 yuan and the land cost was 371.39 yuan. In 2015, 90% of Xinjiang’s cotton was subsidized based on output, and the remaining 10% was subsidized by area in the four prefectures of southern Xinjiang (Hotian, Aksu, Kashgar, and Kezhou). In 2015, the purchase price of Xinjiang seed cotton was basically 5.3-5.8 yuan/kg. After the subsidies were issued, the price sold by cotton farmers was equivalent to 7.29-7.79 yuan/kg. According to calculations, due to the sluggish cotton production situation in 2015, if it is in…If there is land to grow cotton, plus subsidies (temporarily calculated as an average of 500 yuan/mu), cotton farmers should have a profit of more than 200 yuan/mu.
In 2016, Xinjiang local government still provided 90% subsidies based on output and 10% subsidies based on area (limited to the four prefectures in southern Xinjiang). The target price of cotton in 2016 is 18,600 yuan per ton, which is 500 yuan per ton less than in 2015. Calculated based on a yield of 300 kilograms of seed cotton per mu, after the target price subsidy is issued in 2016, the average selling price of seed cotton by cotton farmers is expected to be 7.44 yuan/kg, which is the same as that in 2015. Compared with 2015, the fluctuation range was around 0.2 yuan/kg, which did not have a significant impact on the income of cotton farmers.
From this point of view, although the target price subsidy amount has been reduced this year, it has not had much impact on the income of cotton farmers. Xinjiang’s cotton target price has played a positive role in ensuring cotton farmers’ income from cotton planting and stabilizing Xinjiang’s cotton planting area.
AAA
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