Spain: Cotton Reforms Stunt Production
30 April 2007 The end result of the farmers’ cuts was a 60% reduction in cotton production and exports than marketing year 2005.
For 2007, the reductions in harvested area are likely to stick in the face of low world prices.
The European cotton reform, as agreed between the Spanish Ministry of Agriculture and Spanish producers, allows partial subsidy coupling (up to 35%), with a 70,000-Ha limit. And, while Spanish cotton producers will likely plant the upper limit, it appears that as long as world cotton prices remain low, they will again do what is necessary to capture the 35% payment, but then minimize variable costs and leave a high number of hectares un-harvested.
The Spanish cotton industry is feeling the shockwaves. Ginning companies are closing or threatening to close plants, laying off workers, and in some cases, endangering the ability of many small farming communities to survive.
Some 96% of Iberian Peninsula cotton is produced in the Guadalquivir river basin of southern Spain in the Andalusian provinces of Seville, Cordoba, Cadiz, and Jaen. Smaller areas are located in Cartagena, Murcia, in eastern Spain. About 98% of Spanish cotton is planted in fields with irrigation infrastructure. Some of this land may be converted to other crops where the price situation is less gloomy.
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