The recent decision to cut state cotton purchasing prices will be a double-edged sword, reducing the pressure of rising mainland stockpiles, but also affecting farmers in the long run, an agriculture official said. Feng Huaisong said that since cotton seeds were planted in March, and the decision was announced only in April, farmers were given insufficient warning to enable them to reduce losses by switching to other crops. The Agriculture Ministry official predicted that the price reduction would cause the country's 150 million cotton producers to suffer US$963 million in losses this year. Mr Feng said the price reduction would have an adverse impact on cotton planting and technological upgrading. 'The price reduction is only one step forward in the process of marketisation,' Mr Feng told the China Daily. In an attempt to cut the four million tonne domestic cotton stockpile, the government in April allowed the purchasing price to float within a 5 per cent range, with a base price of 13 yuan (about HK$12.10) per kilogram. The mainland has enjoyed strong cotton output for three consecutive years, with a crop of 4.3 million tonnes last year, while demand has averaged only 3.5 million tonnes during this period. Zhao Xiaomei, an official with the State Development Planning Commission, said the price cut was unavoidable. 'The government can no longer shoulder such a heavy financial burden.' Imports shot up to 800,000 tonnes last year, compared with an average 600,000 tonnes between 1994 and last year.