Domestic Cotton Prices Enter a Low-Price Era as Cotton Farmers Abandon Cotton Growing
Right now is the season for raising cotton seedlings, but affected by the decline in cotton purchase prices, the enthusiasm of cotton farmers for planting cotton in some major cotton-producing areas in the middle and lower reaches of the Yangtze River has generally declined. Many cotton fields have been converted to other crops or left fallow, and some fields have even been planted with trees.
In 2014, the cotton market took a sharp dive. The purchase price of seed cotton fell from more than 4 yuan to 3 yuan, and there has been no sign of a rebound until now. The sharp drop in cotton-growing returns has directly led cotton farmers in traditional cotton-growing areas to stop growing cotton.
Xu Conghui, director of the Cotton Office of the Agriculture Bureau of De'an County, Jiangxi Province, told reporters that due to high labor costs and falling cotton prices, cotton farmers are losing money growing cotton. It is estimated that the cotton planting area this year will drop by at least 20,000 mu.
Some Plots Have Already Been Planted with Trees
De'an County, Jiangxi Province, as a major cotton-producing area in the middle and lower reaches of the Yangtze River, has a history of more than 20 years of cotton growing. Due to farming techniques and the fixed nature of the land, farmers generally would not easily switch to other crops, but this year there has been a collective phenomenon of abandoning cotton.
April is the spring plowing season. The reporter returned to his hometown, De'an County, Jiujiang City, Jiangxi Province. At this time in the past, farmers were all busy growing cotton. However, the situation this year is somewhat different.
In the fields of Dafan Village and other places in De'an County, the reporter saw that the number of cotton seedlings farmers are now raising has decreased. Some cotton fields have been converted to corn or are being converted to rice, some land has simply been left fallow and is overgrown with grass, and some plots have been planted with landscape tree seedlings or fast-growing forests.
The reporter saw that in Dafan Village, Huangtong Village, and other plots in Fenglin Town, De'an County, some trees have already grown to two or three meters high, forming small groves. The Land Administration Law clearly states to “strictly control the conversion of cultivated land to non-cultivated land.” Against the background of the state protecting cultivated land, planting trees on cultivated land is still a trend worth guarding against.
However, some villagers believe that with fewer people growing cotton this year, more land will be left fallow. “Leaving it fallow is not as good as planting some corn or trees, which do not need manpower to manage.” During the busy farming season, the reporter saw that agricultural production is not the top concern of farmers. What villagers discuss most is where to go to work, and even some middle-aged farmers are taking jobs in the county town.
“Growing cotton now earns less and less money. Just finding any job in the county town for more than 1,000 yuan is better than growing cotton.” said Jin Qirong, a villager from Dafan Village. Last year, the couple grew more than ten mu of cotton and earned only 7,000 to 8,000 yuan. “There is nothing good about farming.” The reporter also confirmed the fact that farmers are abandoning planting from multiple cotton seed sales outlets. On the seed sales street in De'an County, the reporter learned from an investigation that seed store owners generally complained about declining seed sales. Song Yan'an, head of Zhongmin Seed Industry Sales Company, said that this year's seed sales were only 1/3 of last year's. The head of the Weinong Seed Sales Office also said that this year's cotton seed sales were only 20% to 30% of previous years.
Data from the De'an County Agriculture Bureau show that last year's cotton planting area was 66,000 mu. The Cotton Office estimates that this year's cotton planting area will probably be only 46,000 mu, a direct drop of 20,000 mu in planting area, or 30%.
The Phenomenon of Cotton Farmers Abandoning Cotton Is Spreading
In fact, in recent years, the prices of agricultural production materials such as chemical fertilizers and pesticides, as well as labor costs, have continued to rise, while cotton prices, which are closely related to farmers' incomes, have stagnated, greatly affecting cotton farmers' enthusiasm for growing cotton.
Xu Conghui explained to reporters that before 2014, the state purchased cotton at protective prices, and cotton prices were basically between 4.5 and 5 yuan. Now they have fallen to 3 yuan.
Under the influence of multiple unfavorable factors, farmers ultimately can only vote with their feet and give up growing cotton.
In fact, the phenomenon of cotton farmers abandoning cotton has appeared not only in Jiangxi, but also in cotton-growing areas such as Hubei and Shandong.
Sun Liwu, a cotton analyst at Sublime China Information, said that cotton returned to a low-price era after new cotton was concentrated on the market in October 2010, down 27% year on year. It is expected to hover basically between 13,000 and 14,000 yuan/ton this year, and cotton farmers' seed cotton selling prices are down 25% to 31% year on year. “The actual returns for cotton farmers are too far behind those for grain and vegetables, and enthusiasm for planting cotton will still decline. It is expected that the national cotton planting area will fall to 49 million to 50 million mu in 2015, down 18% to 19% year on year.”
The decline in cotton planting has also been affected by imported cotton. In the whole of 2014, China imported 2.4407 million tons of cotton, a decrease of 1.7097 million tons year on year. China applies a quota system to imported cotton. Cotton within the quota is subject to only a 1% tariff, while cotton exceeding the quota is subject to a 40% tariff.
Sun Liwu said in an interview that domestic and international cotton price differences are basically flat. Previously, calculations were based on the sliding-scale duty. This year, only an 89.4 million ton 1% quota was issued, but there is still a price difference of about 2,000 yuan/ton between customs clearance at the 1% tariff and domestically circulated cotton.
In Xu Conghui's view, the domestic cotton market price is greatly affected by imported foreign cotton. The United States has a high degree of mechanization, while Africa has low labor costs. They have their own advantages. Our country has high labor costs. If cotton sells for two yuan per jin, farmers will lose money. Enterprises operate independently and are regulated by the market, so they are willing to use imported cotton.
Starting this year, because imported cotton prices have continued to rise, the state has begun to gradually reduce cotton imports. According to customs statistics, in March China imported 127,900 tons of cotton, a decrease of 31,100 tons from the previous month, or a decline of 19.6%.
For cotton farmers, what they care about most is still their own returns. If growing cotton yields less than rice, abandoning cotton is also a helpless choice. However, because rice requires water conservancy, and past cotton growing has left canals and reservoirs unrepaired, they can only switch to corn and potatoes, or simply plant trees.
Guo Qihao, director of the De'an County Agriculture Bureau, said that nowadays the decision-making power for farming is in the hands of ordinary people, and the county agriculture bureau can only provide guidance, such as guiding farmers to grow corn, grow potatoes, or grow mulberries and raise silkworms. If cotton prices remain sluggish, it is impossible to keep growing it forever, and the agricultural structure must be adjusted.