The 2020 Global Cotton Subsidy Report released by the International Cotton Advisory Committee (ICAC) stated that in 2019/20, subsidies in the global cotton industry (including direct production subsidies, border protection, crop insurance subsidies, cost expenditures and transportation subsidies, and minimum Support prices) are expected to total US$8 billion, a 39% increase from US$5.7 billion in 2018/19. The average subsidy amount for the domestic cotton industry in 11 countries around the world is 20 cents per pound, which is higher than the 15 cents per pound in 2018/19.
According to ICAC’s long-term tracking, from 1997/98 to the present, cotton subsidies and cotton prices have shown a very obvious negative correlation. , that is, in years when cotton prices are high, cotton subsidies decrease, and in years when cotton prices are low, cotton subsidies increase. The negative correlation between cotton prices and cotton subsidies has remained very stable over the past few years. The average Kotruk A index fell from 91 cents/lb in 2013/14 to 70 cents/lb in 2014/15 and 2015/16, before rising to 83 cents in 2016/17. In 2016/17, the subsidies received by cotton farmers dropped from the previous historical high, but in 2017/18 the Kotruk A index rose to 88 cents, but subsidies also increased. In 2018/19, cotton prices fell slightly, and cotton Subsidies have also been slightly reduced. In 2019/20, the international cotton price fell to 71 cents/pound, while subsidies increased significantly. Cotton prices and cotton subsidies continued to maintain a long-term negative correlation.
In 2019/20, minimum support prices did not occur in Brazil and Pakistan because market prices were higher than government prices most of the time. Some countries continue to provide subsidies for cotton production inputs, especially fertilizers, warehousing, transportation, inspection and other marketing costs. At the same time, although crop insurance subsidies have not been widely promoted, the amount of subsidies is increasing. From 1997/98 to 2007/08, the average proportion of global subsidized cotton production in total cotton production was 55%, rising to 83% in 2008/09. From 2009/10 to 2013/14, the average proportion of subsidies fell to 48%. From 2014/15 to 2019/20, the average proportion of subsidies ranged from 45% to 76%, with the specific proportion depending on the rise and fall of cotton production and international cotton prices.
Most of the data collected by ICAC comes from government agencies, but there is also some information from public channels. ICAC makes every effort to report on the measurable impact of all government actions and encourages countries to provide data and explanations in this regard to improve the accuracy of subsidy data. </p
