Excerpt from Cotton in Five Eurasian Countries

It is apparent that cotton has' very strong competitive staying power in the Middle East and Southeast Asia. Although the economic reasons for this strong position may vary from country to country, a basic underlying factor is that cotton can be produced and marketed on a volume basis with little risk of quality deterioration as it moves through international marketing channels. Every country has some food and specialty cr0ps that may give higher economic returns to a limited quantity of the resources em ployed in their production. However, limited local demand, seasonality of production, and especially the lack of rapid transportation and modern refrigeration equipment set an upper limit on the volume that can be marketed efficiently at prices returning more to producers than cotton prices do. For this reason, in the competition for existing produc tive resources as well as for new resources that might be brought into agricultural pro duction, the broad impact takes place between cotton and the small grains-either food or feed.

Throughout this general area of the world, cotton at 1956 cost-price relationships has been on the average from one and one-half to three times as profitable as the small grains in the irrigated areas. In the rain-fed areas, cotton's relative profitableness vis-a-vis the small grains narrows to the point where the quantity of rainfall is so small and its distribution so unpredictable that cotton production is not practical because of physical limitations. The small grains, however, can be grown during the winter and Spring, When rainfall is highest. Thus they represent the most economic use of the land and labor resources within an individual country, even though the absolute return is very small.

This survey of cotton production pointed up the importance of price to the production response of producers. Even with the decline of 20 to 25 percent in world cotton prices from the 1955-56 season to the 1956-57 one, countries such as Pakistan and India and Syria continued to tax raw cotton exports. Despite these export taxes, cotton maintained its competitive advantage over alternative crops in those areas where it has been a traditional cr0p. No country made a marked cutback in acreage during the 1956-57 sea son in anticipation of lower cotton prices. To generalize, it is apparent that the down ward adjustment in world cotton prices from 1955-56 season prices did not cause a significant shift of resources from cotton to other crops. Even further downward adjust ments from the 1956-57 season prices would have only a minor influence, unless they involved a considerable downward trend in cotton prices relative to the prices of other creps-at least 25 to 30 percent from 1956-57 price relationships.

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