China'S Integration With The World: Analysis Of Cotton Subsidy Policy

In April of this year, the new cotton policy of China ended the policy of temporary cotton purchase and storage for more than three years, instead of the cotton target price policy, that is, the difference subsidy. When the market price was lower than the target price, the state directly subsidized the farmers.

Recently, according to the announcement issued by the China Cotton Association, the specific subsidy standard has already come out. The mainland subsidy ranges from 9 provinces in Shandong, Hubei, Hunan, Hebei, Jiangsu, Anhui, Henan, Jiangxi and Gansu. The subsidy standard in 2014 is 2000 yuan / ton, and the subsidy for the next year is 60% of the subsidy granted by Xinjiang.

The ceiling should not exceed 2000 yuan / ton.

This shows that China has joined the Global Cotton Subsidy family.

The reason why we should replace the temporary purchase and storage policy with cotton target price is because the problem of temporary cotton purchase and storage policy has been highlighted. The domestic and foreign cotton prices have been greatly contrasting. The linkage problem in the international market has led to the difficulty in maintaining the safety of China's cotton industry.

The target price policy is just good enough to make up for these shortcomings.

Cheng Guoqiang, a research expert in China's agricultural subsidy system and a researcher at the State Council Development Research Center, said: "although the temporary storage policy has stabilized the cotton price, it has interfered with the cotton price formation mechanism, causing domestic and foreign cotton prices to hang upside down, distorting the cotton market and increasing the financial burden of the government.

The core of the new deal is to return the formation of cotton prices to the market, determine the cotton price by market supply and demand, and gradually lead the whole industry to normal.

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Subsidies for cotton and other agricultural products in the world are normal. In the United States, cotton is the most heavily subsidized and there is basically no textile industry in the mainland, so cotton is exported at low prices, which has lowered global cotton prices and has become the wind direction of global cotton prices.

Why should the US subsidize the cotton industry? What is the advantage of such a great effort? Experts say: "this is because the competitive advantage of agriculture is lost. If there is no subsidy, the income of agricultural workers is not enough to attract them to remain in agriculture. If we want to keep the development of agriculture, we will require the income level of agricultural operators to be equal to other industries in the society.

Agricultural subsidies are stable employment. In fact, the United States has a lot of subsidies to agriculture, such as soybeans, wheat, corn and other products.

Get up.

Many developing countries also maintain cotton cultivation because of low labor prices, so even if the income is not high, but still have a comparative advantage in the country, other countries such as Brazil and Pakistan also have subsidies, but the developed countries have more subsidies, and the developing countries are more willing and less capable. China, of course, has such a situation. The income of agricultural labourers has been getting lower and lower than other industries, so it is necessary to rely on subsidies to maintain the industry.

Now that there is a good side, there will inevitably be some negative effects.

If some countries continue to increase subsidies due to supporting industries, they will cause global subsidies price confusion.

So that the producers who are going to withdraw from agriculture continue to stay in this field, which will increase your agricultural population.

If the Chinese government's Cotton Subsidy increases, the raw material cost of the downstream cotton textile industry will be raised, leading enterprises to think of other ways to set up factories abroad.