Target price for cotton set at 19,800 yuan per ton, reform pilot officially launched
On September 3, the National Development and Reform Commission announced that, with the approval of the State Council, the 2014 cotton target price has been set at 19,800 yuan per ton. According to the State Council's arrangements, the Xinjiang cotton target price reform pilot will be launched in 2014. The NDRC said the "Cotton Target Price Reform Pilot Plan"
On September 3, the National Development and Reform Commission announced that, with the approval of the State Council, the 2014 cotton target price has been set at 19,800 yuan per ton. According to the State Council's arrangements, the Xinjiang cotton target price reform pilot will be launched in 2014.
The NDRC said the "Cotton Target Price Reform Pilot Plan" has been issued to the pilot areas, the "Xinjiang Cotton Market Price Monitoring Implementation Plan" has been formulated, and price monitoring work has already started. The specific implementation plans for the cotton target price reform pilot in the Xinjiang Autonomous Region and the Corps will soon be announced, and all work is proceeding steadily.
In April this year, the State Council announced that the national temporary cotton purchase and storage policy would be abolished, and producers would sell cotton at market prices. After abolishing the temporary purchase and storage policy that supported the market, the state will gradually introduce a target price subsidy policy to guide cotton production through subsidies covering the price difference from the target price.
The so-called target price subsidy policy is an agricultural support policy that, on the basis of market-formed prices for agricultural products, protects producers' interests through price difference subsidies. After the cotton target price policy is implemented, the temporary purchase and storage policy will be abolished, and producers will sell cotton at market prices. When the market price is lower than the target price, the state will grant subsidies to producers in the pilot areas based on the difference between the target price and the market price and factors such as planting area, output or sales volume; when the market price is higher than the target price, the state will not issue subsidies to producers, but will instead adopt a subsidy form for end consumers.
The introduction of the direct subsidy policy will have a huge impact on the entire industrial chain. The marketization of cotton prices will bring cotton prices in line with international standards, which not only ensures cotton farmers' income and reduces the fiscal burden, but also helps cultivate the international competitiveness of textile enterprises.
The National Development and Reform Commission said that, in order to ensure the smooth progress of the target price reform pilot and maintain stable market operation after new cotton comes onto the market, the state will take comprehensive measures to strengthen market regulation. First, after new cotton comes onto the market, the release of reserve cotton will be stopped to create good market conditions for the purchase and sale of new cotton. Second, do a good job in purchasing new cotton and guide enterprises and farmers to actively buy and sell. Third, properly arrange imports and encourage enterprises to use more domestically produced cotton. Fourth, formulate a bottom-line contingency plan. When domestic cotton prices fall excessively and “difficulty in selling” occurs, necessary measures will be taken to encourage enterprises to enter the market and purchase, stabilize the market, and resolve “difficulty in selling.”
The NDRC said the "Cotton Target Price Reform Pilot Plan" has been issued to the pilot areas, the "Xinjiang Cotton Market Price Monitoring Implementation Plan" has been formulated, and price monitoring work has already started. The specific implementation plans for the cotton target price reform pilot in the Xinjiang Autonomous Region and the Corps will soon be announced, and all work is proceeding steadily.
In April this year, the State Council announced that the national temporary cotton purchase and storage policy would be abolished, and producers would sell cotton at market prices. After abolishing the temporary purchase and storage policy that supported the market, the state will gradually introduce a target price subsidy policy to guide cotton production through subsidies covering the price difference from the target price.
The so-called target price subsidy policy is an agricultural support policy that, on the basis of market-formed prices for agricultural products, protects producers' interests through price difference subsidies. After the cotton target price policy is implemented, the temporary purchase and storage policy will be abolished, and producers will sell cotton at market prices. When the market price is lower than the target price, the state will grant subsidies to producers in the pilot areas based on the difference between the target price and the market price and factors such as planting area, output or sales volume; when the market price is higher than the target price, the state will not issue subsidies to producers, but will instead adopt a subsidy form for end consumers.
The introduction of the direct subsidy policy will have a huge impact on the entire industrial chain. The marketization of cotton prices will bring cotton prices in line with international standards, which not only ensures cotton farmers' income and reduces the fiscal burden, but also helps cultivate the international competitiveness of textile enterprises.
The National Development and Reform Commission said that, in order to ensure the smooth progress of the target price reform pilot and maintain stable market operation after new cotton comes onto the market, the state will take comprehensive measures to strengthen market regulation. First, after new cotton comes onto the market, the release of reserve cotton will be stopped to create good market conditions for the purchase and sale of new cotton. Second, do a good job in purchasing new cotton and guide enterprises and farmers to actively buy and sell. Third, properly arrange imports and encourage enterprises to use more domestically produced cotton. Fourth, formulate a bottom-line contingency plan. When domestic cotton prices fall excessively and “difficulty in selling” occurs, necessary measures will be taken to encourage enterprises to enter the market and purchase, stabilize the market, and resolve “difficulty in selling.”