China's resumption of sensitive but must be carried out cotton subsidies

Not long ago, Xiaojian, vice minister of agriculture was held in Nanning, Guangxi national forum on rural reform and development proposed, given the current number of the cotton harvest drop in price the main growing areas, farmers sell cotton and other difficult issues, suggested that the state has been established in the light of the current rice wheat protective acquisition policy, as soon as possible the minimum cotton price supports policies to ensure the healthy and stable development of the cotton industry.

The impact of subsidies on cotton prices as a major, for a time, the topic of cotton subsidies in the market once again become the focus of discussion.

Before 1999, China had implemented to protect the cotton purchase price of the policy after the allocation of resources to improve the efficiency of the cotton and reduce the huge financial loss pressure, the cotton price was officially open, completely determined by the market. But when Cotton changed state expressly that "special cases, the State may purchase price in the certain period of time or sales price of cotton provides a degree of restriction."

Currently, the United States, European Union, the world's major economies, and cotton-producing countries have implemented the cotton industry subsidies. For example, as the world's second largest cotton producing countries, the United States, subsidies to domestic cotton industry is divided into production subsidies, marketing subsidies and trade subsidies, including subsidies for the first two targets for the cotton growers. Although trade subsidies (ie subsidies Step2) required by WTO, was lifted in August this year, but the subsidies to cotton exporters targeted, and accounts for small proportion of the total subsidies, the cotton-growing areas of the U.S. subsidies on the number of still great.

China is the world's largest cotton producer, China is second only to cotton in the major grain crops. According to the Ministry of Agriculture statistics, about 140 million rural population's main income comes from the cotton industry. As the domestic cotton price fluctuations in recent years, great, farmers are often the first to be affected. In the "three rural" issue of growing concern today, the Government re-assess the feasibility of subsidies on cotton farmers are expected.

Current international subsidies on cotton farmers, there are two main ways: first by acreage subsidies directly to farmers; Second, for the protection of subsidies, which according to the production cost of farmers to determine the protective price, when the market price is lower than protective price, the Government subsidies to cotton farmers by the difference. From our present situation, if the decision to resume subsidies for cotton farmers, then the latter method is better than the former.

While subsidies help to improve the situation of cotton farmers, but subsidies to cotton farmers in China is also facing some problems.

First, although there are still many countries on the international cotton industry subsidies, but the reduction of cotton subsidies has been the talk of the WTO. Held in Hong Kong in 2005, the WTO Sixth Ministerial Conference, member countries agreed to abolish export subsidies for cotton will be the future. This year in July, held in Geneva in the Doha Round negotiations, it is precisely because the U.S. refused to cancel the issue of domestic cotton subsidies to compromise but failed. In the Doha Round negotiations at a sensitive stage, the restoration of subsidies to cotton farmers may be attracted international condemnation of the sound.

In addition, the Sino-US agreement has provisions to abolish the country cotton export subsidies, domestic subsidies for cotton production and circulation should be phased out. Therefore, our government can take to strengthen cotton farmers to plant, such as guidance, strive to reduce the price of agricultural means of production and a series of measures to promote a broader range of interests of farmers.

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China's resumption of sensitive but must be carried out cotton subsidies