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Target-Oriented Price Reform of Cotton in Pilot Areas: Effects and Measures for Improvement(No.34, 2016)


By Cheng Guoqiang, Department of International Cooperation, DRC,

Research Report No.34, 2016 (Total 4917) 2016-3-25

Abstract: In the past two years, the target-oriented price reform of cotton in the pilot areas of Xinjiang has achieved remarkable initial progress than expectations. The achievements are mainly embodied in the following three aspects: the system in which cotton price is fixed by the market is basically established; the basic earnings of cotton farmers are under effective protection which has assured the basic stability of cotton production; and the transformation of production mode and structure adjustment of cotton production are further promoted. Some of the experience of the pilot areas can offer valuable implications in promoting pricing mechanism reform of other major agricultural products. However, with the change of the macro-economic performance as well as the supply and demand pattern at home and abroad, the pilot areas also face some new issues such as how to push forward inventory liquidation and structure adjustment of cotton production; how to avert the restrictions imposed by international rules on total subsidy; and how to further optimize the operation scheme and improve relevant supporting measures. According to the new situation and new demand of reform, efforts should be made to continue the improvement of the pilot projects. Based on the systematic summary and evaluation of the past practice and experience, we should further innovate subsidy means, bring into full play the experience of pilot areas, and establish a new policy-supporting mechanism which is not only in compliance with international rules, but could also protect the basic earnings of cotton farmers as effectively as the “income insurance for cotton farmers”.

Key words: cotton, target-oriented price reform, income in pilot areas, insurance