China : Cotton growing, a tough trade

It has been almost two months after the cotton harvest season and the land is now planted with winter wheat. Farmers believe that the grain price is aggressively rising, that should bring substantial earnings next year. At the same time, selling the few thousand kilograms of cotton, still in store, has become a problem.

Cotton growing is one of the most important works in Shangdong as cotton is a major economic source for a family. However, in recent years, farmers avoid planting cotton as it is a troublesome job.

More important is that the cost of their efforts could not bring back more earnings. Cotton procuring price has not been high enough in the last few years.

In the past few years food price has gone up, cotton price was capped by imported product. Now grain sells at 1.5-1.6 yuan per kg, while unginned cotton remains at 5.2 yuan per kg.

Like most young peasants in China, now the majority of young people do not stay at home growing cotton, they move into cities and take jobs there for most time of a year.

Cotton crop needs pesticide once a week. The annual expenditure on irrigation and fertilization is not a small sum. Investment of each mu (one hectare =15 mu) of cotton land is more than 300 yuan, not including labor costs. Even so, cotton yield has not increased, because Chinese government allows large amount of cotton imports under tariff quota.

Though the price is not high enough, and cotton growing is very hard, cotton cultivation is not too risky. If you are growing vegetables, flowers and fruits, and other cash crops, you must be careful to watch out the price volatilities.
 
This is the reason for farmers in traditional cotton production area to continue cotton farming.

At the end of last year, Oxfam Hong Kong said in a report that the US was dumping large quantities of cotton into Chinese market, which depressed China’s cotton price, forcing many farmers to retreat from cotton production. According to the estimation from Ministry of Agriculture's Rural Economic Research Center, in the past six years, imported cotton seized away more than 25 billion yuan from Chinese farmers, each cotton grower lost an equivalent income of 250 yuan.