China's Major Cotton-Producing Regions See a Shift in Pattern as Planting Area Shrinks in the Yangtze and Yellow River Basins

This year's Central Document No. 1 proposed launching a pilot reform of the target price for cotton in Xinjiang. In April, the National Development and Reform Commission, the Ministry of Finance and the Ministry of Agriculture jointly announced that the 2014 cotton target price would be 19,800 yuan/ton. Along with the introduction of the cotton target price policy, the temporary purchase and storage policy was abolished.

This means that cotton farmers will thereafter sell their cotton at market prices, and when the market price falls below the target price, the state will give corresponding subsidies to cotton farmers in the pilot areas.

In recent years, cotton field area in the Yangtze River Basin and the Yellow River Basin has been continuously shrinking. A few days ago, when reporters interviewed cotton farmers, cotton traders and cotton seed enterprises in Shandong, Hubei and other places, they learned that cotton field area in many places is still decreasing. The reasons for the low enthusiasm for growing cotton are many, but the fundamental reason is that the spatial layout focus of China's major cotton-producing regions is shifting toward the inland northwest.

A cash crop that is no longer “economic”

There is a saying in northwestern Shandong: “Golden Gaotang, Silver Xiajin.” Today it is hard to explain clearly the origin of this phrase, but the most widely circulated explanation is related to cotton.

According to the Records of Gaotang County, “cotton is a constant product of Gaotang,” and “among goods, kapok ranks first in Qilu.” The saying about a “constant product” is indeed not false. Cotton cultivation in Gaotang County began in the Song Dynasty, continued through the Yuan Dynasty, flourished most in the Ming and Qing Dynasties, and even today the planting area is still not small. With a long history of cultivation, everyone is good at growing cotton, yields are high, and the amount marketed is also large, so that “among goods, kapok ranks first in Qilu.” Cotton farmers made money, which drove surrounding cities and counties to follow suit in growing cotton. Among them, the cotton industry in Xiajin County, Dezhou City, which is adjacent to Gaotang County, developed quickly, and thus the saying “Golden Gaotang, Silver Xiajin” came into being.

In Liulimiao Village of “Golden Gaotang,” the main household income of cotton farmer Zhao Dehua over the past decade or so came from cotton. By growing cotton, he supported 5 daughters. When the returns from growing cotton were at their highest, Zhao Dehua opened up wasteland and planted cotton day and night, and at most he planted 20 mu of cotton. In 2011, he still had 16 mu of cotton fields.

But now, Zhao Dehua no longer grows cotton. “It takes labor and trouble, and the returns are still poor. It is better to grow grain.” Having grown cotton for most of his life and feeling quite attached to cotton, Zhao Dehua also began to complain about growing cotton.

Talking about the reason for no longer growing cotton, Zhao Dehua said the main issue is that the labor input is too great. Pruning cotton branches, pinching off the side buds, killing cotton pests, picking cotton, and plowing the land several times too, all told it takes a month of work. “Now growing grain is mechanized throughout the whole process, at most three to five days of work. After planting, you can go out to work, and even taking it easy you can earn more than 100 yuan a day.” By Zhao Dehua's somewhat conservative calculation, the labor input for growing cotton is worth at least 3,000 yuan.

When asked about the returns from growing cotton, Zhao Dehua waved his hand again and again. “Although cotton is called a cash crop, it is no longer ‘economic.’” In his impression, in the years when he grew the most cotton, wheat was about 0.6 yuan/jin, while one jin of cotton could sell for 4 yuan, so growing cotton was of course worthwhile. But now, the minimum purchase price of wheat is close to 1.2 yuan/jin, while one jin of cotton still cannot sell for 5 yuan.

“Maybe it is caused by the overall environment. Cotton just cannot fetch a good price.” Around 2010, when cotton prices were at their highest, Zhao Dehua's family could still sell damp seed cotton for 7.2 yuan. In only three or four years, the cotton price fell by more than one third, and this year's price is a little lower than last year's.

A very important part of what Zhao Dehua called the ‘overall environment’ is the temporary cotton purchase and storage policy and the target price policy.

In 2011, China began implementing the temporary cotton purchase and storage policy. Over the past few years, this policy did indeed play an important role in stabilizing cotton production and protecting the interests of cotton farmers. However, because the cotton purchase and storage price had always been higher than the import price, the pressure of purchase and storage grew greater and greater. In April this year, the temporary cotton purchase and storage policy was abolished, and the target price policy was introduced in a timely manner.

However, the target price of 19,800 yuan/ton was already somewhat lower than last year's temporary purchase and storage price of 20,400 yuan/ton. In addition, the detailed rules for implementing subsidies had not yet been issued, so cotton farmers had no confidence, and were even less willing to grow cotton.

Not only did Zhao Dehua stop growing cotton, but in Liangcun Town, where he lives, and even in Gaotang County, cotton field area has also been continuously decreasing in recent years. In 1984, about 60 percent of Gaotang County's one million mu of farmland was planted with cotton, while this year only 128,000 mu were planted.