Posted on 08/29/2013 7:03:47 PM PDT by TexGrill
(Reuters) - China is preparing the ground to scrap a controversial scheme to stockpile cotton in favor of subsidizing farmers, a move that could slash imports by the world's top buyer of the fiber and herald a broad shakeup of Beijing's sensitive farm policies.
Abandoning stockpiling would mark the end of a system that has distorted the market to such a degree that it has been cheaper for Chinese mills to import cotton grown abroad than to buy domestic produce.
China's top economic planning body has completed a draft plan to change to subsidies and is seeking opinion from experts and the industry, people involved in the discussions told Reuters. This could within months set in course a policy change.
With 60 percent of world cotton stocks held in Chinese state reserves, changes to a scheme that has cost at least $33 billion so far, based on estimated payments over the last two years, could hit prices hard.
Global prices have climbed 13 percent since the start of the year, but could reverse as Chinese mills would be able to buy more locally grown cotton freed up for the local market.
The reform could also stoke calls to shift to subsidies for growers of other commodities such as sugar and oilseeds, with China's sugar association already considering a switch.
China would continue to buy for strategic food reserves in case of emergency, however.
"All parties are working to change the (cotton) policy," said Du Min, director of the Research Center for Rural Economy at the Ministry of Agriculture.
"Farmers are not planting cotton anymore, while mills are no longer spinning (domestic) cotton. The stockpiling has to come to a stop, otherwise the whole industry chain will be ruined."
(Excerpt) Read more at reuters.com ...
Wonder what’s looming?
Fir a country that is a net importer of food, using domestic stock to create their own supplies seems counternoroductive. Particularly when the land is becoming more arid and desertified by some 6% a year.
According to China’s own experts it could take 300 years to reverse current desertification if they got serious about improving conditions tiday.
May be a pretty good bet they won’t be attacking us anytime soon.
If an army marches on its belly, they just don’t have the supplies to support the logistics.
Cotton? Looms? HaHaHa!
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