Cotton Policy: Adjusting Industrial Structure With Invisible Hand

The cotton subsidy payment in 2014/2015 is not yet over. The target price of cotton in the new year is in the making.

At present, Xinjiang has launched the pilot evaluation of the target price reform in 2014, summed up experience and shortcomings, and plans to optimize the implementation plan.

Gao Fang, executive vice president and director of the cotton and hemp Bureau of the national supply and Marketing Cooperative Bureau, suggested that in the new year's financial subsidies, we hope to improve the subsidy way and improve its scientificity, accuracy and effectiveness.

Liu Weidong, director of the agricultural products and water resources price office of Xinjiang development and Reform Commission, participated in the whole process.

The formulation of a pilot scheme for target price reform, he said, has been implemented for a year.

The implementation effect and shortcomings are clear.

The local cotton growing areas in Xinjiang are scattered, with small plots and low information level. During the reform, farmers need to adapt to the policy, and the processing capacity of cotton in Xinjiang has far exceeded the production capacity of cotton. The reform will inevitably re integrate, adjust or even eliminate this part of the processing industry.

He pointed out that in the design of the implementation plan of cotton target price reform, we also fully considered the promotion of Xinjiang's land withdrawal and water reduction project.

According to the development thinking of Xinjiang, under the premise of improving quality and increasing efficiency, some cotton growing areas in Xinjiang will gradually withdraw from cotton planting and production.

Liu Weidong said that the formulation of the cotton policy in the new year will focus on the optimization of the procedures for area declaration and subsidy, simplify the simplification as much as possible, tighten supervision over the supervision, improve the efficiency of subsidy payment, explore the mechanism of pre appropriating funds, and propose solutions for the cases in the pilot reform, such as false invoices, cotton rotation, and no warehousing and public inspection.

Gao Fang expressed the hope that the cotton policy should be guided by financial subsidies, linking the subsidies to the output and internal quality of cotton, and adjusting the industrial structure of cotton by means of marketization, so as to guide the continuous improvement of cotton quality.

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In the textile industry, cotton is more concerned as an industrial raw material. However, cotton and corn and soybeans belong to agricultural products. The implementation of direct subsidy policy is the reform of the price mechanism of agricultural products, including agriculture.

Cheng Guoqiang, Secretary General of the academic committee of the State Council Development Research Center, said: "at present, the price formation mechanism of agricultural products is at a difficult stage of choice.

The attitude of some academics and policy-making departments to reform has gradually become somewhat hesitant or even flinch from the optimism and optimism at the beginning of 2014.

And my view is that the price formation mechanism for agricultural products, the reform of cotton price formation mechanism must be insisted, there is no retreat.

Why is Cheng Guoqiang so steadfast? Statistics show that in the past 10 years, the total cost of China's cotton industry has increased by 148%, which is the fastest rising among all agricultural products except sugar. Among them, artificial rise has contributed to the largest proportion of the cotton industry, accounting for 74%.

In Cheng Guoqiang's view, under the new normal, China's agricultural products have entered a critical period of mechanism innovation and structural pformation.

How to innovate the way of agricultural management, eliminate the existing small-scale and household management pattern, promote quality and efficiency, reduce costs and reduce consumption has become a key issue.

And for the whole cotton industry, market-oriented reform is the only way out for the whole cotton industry. If we are shaken in the current critical period, especially in the way of policy implementation, the consequences will be unthinkable.

After the determination of the general direction is the formulation of policies, Cheng Guoqiang introduced that at present, the whole world has two ways to support agriculture in terms of agricultural policy experience.

One is to subsidize producers, to ensure the supply of certain kinds of agricultural products; the other is to support the whole agriculture, including science and technology promotion, environmental improvement, technological innovation, and so on, and does not play a direct role in producers.

No matter which policy logic we choose, we can not drag on these two frameworks.

Cheng Guoqiang said that at present, China's subsidy to cotton is beyond the price ceiling, especially the cotton purchase and storage policy, and the state has invested a lot of financial support.

If we want to get rid of the plight of high subsidies and insist on the reform of price formation mechanism, it is the only way to persist in marketization.