Consolidating Xinjiang'S Cotton Target Price Reform Pilot And Adjusting Cotton Import Quota

Cotton is a staple agricultural product and an important strategic material related to the national economy. China, as the largest cotton consumption country, promotes the steady development of cotton production, meets the needs of the society, improves the quality of cotton supply, and avoids the damage of the cotton market to farmers. It is one of the important tasks of the party and the government.

In order to further play the decisive role of the market in the allocation of resources, since 2014, the state carried out the pilot project of cotton target price reform in Xinjiang. At present, two rounds of reform experiments have been carried out, with remarkable results, mainly in the following aspects: first, the purchase price of cotton production has been liberaled, and the cotton price formation mechanism has been perfected, and the cotton price difference has been narrowed substantially. Two, the state reserve cotton inventory returned to normal level; three, enhanced the comparative advantage and competitive advantage of cotton production in Xinjiang, the quality of cotton has been improved, the quality and price has become increasingly obvious; four, the cost of China's textile cotton has been reduced, the competitiveness of China's cotton and textile products has been enhanced, and the joint operation of the cotton industry has been promoted. Five, compared to the period from 2011 to 2014, when the state implemented the temporary cotton purchase and storage policy, the actual appropriation allowance for cotton was greatly reduced.

But at the same time, China's cotton industry is still facing severe challenges, especially the Sino US trade friction, resulting in increasing uncertainties in domestic and foreign markets. Local trade protectionism prevails, and market demand decreases. Foreign cotton and cotton yarns are still heavily imported, resulting in a continuous decline in cotton prices in China, an increase in inventories, a serious lack of sales, and a sharp decline in cotton yarn prices, from 5 in 2019. Monthly 15738 yuan / ton fell to 13861 yuan / ton in January 2020, or 11.9%. Meanwhile, since May 2019, some western countries have attempted to use cotton to combat the international competitiveness of China's textile industry chain, undermine Xinjiang's implementation of the development of textile and garment industry to promote employment of millions of people, and have a certain impact on the development of China's cotton industry and textile industry.

In order to ensure the safety of China's cotton industry, further promote the sustainable development of China's cotton industry, safeguard the interests of the farmers, and maintain the international competitive advantage of China's textile industry, it is recommended that:

First, we should further strengthen the construction of the national high quality commodity cotton base. It is suggested that 10 million acres of high quality cotton fields should be selected as the demonstration field from 39 million 190 thousand acres of cotton growing area in Xinjiang, so as to further improve the standardization and standardization of cotton planting. Taking Australia cotton as the goal, we should fully study the cotton quality factors and the direction of high quality demand, and strive to improve the quality of domestic cotton and enhance the international competitiveness in various aspects such as the selection of varieties, cultivation techniques, picking methods, processing techniques and industrial policies in the high quality producing areas. Efforts should be made to build a scientific research and technological extension system, operation and service system for cotton production so as to enhance cotton farmers' income and cotton competitiveness.

Two, further consolidate Xinjiang cotton target price reform pilot results, and continue to deepen and improve the cotton target price system. We will continue to implement the cotton target price reform and establish a long-term mechanism conducive to the development of the cotton industry, ensure national cotton safety and enhance the competitiveness of Xinjiang's cotton market, and further promote the sustained growth of Xinjiang's cotton farmers' income on the basis of stabilizing the existing reform results. It is proposed to extend the existing Cotton Subsidy time limit from three years to five years, further improve and innovate the subsidy mode, clarify the subsidy conditions, and guide the high quality and high price. We should explore innovative target price system, introduce insurance mechanism, and gradually establish the basic income insurance and green development subsidy system for cotton production.

Three, moderate adjustment of cotton import quotas to maintain stable domestic cotton market. Because of the spread of cotton at home and abroad and the rapid increase of imported cotton, the amount of cotton imports (mainly imports from the United States, Australia and India) increased from 900 thousand tons in 2016 to 1 million 849 thousand tons in 2019, causing a serious impact on the domestic cotton market, resulting in a decline in cotton prices and an increase in inventory. It is recommended that cotton import quotas be adjusted moderately on the basis of not violating the WTO agreement, so as to protect the interests of domestic cotton farmers.

Four, support the extension of Xinjiang's cotton industry to the downstream, increase the in situ conversion rate of cotton and stabilize the cotton price expectation. Through the guidance of national policies, we encourage domestic cotton textile production capacity to transfer to Xinjiang, slow down the pace of domestic cotton textile enterprises transferring to Southeast Asia and Africa, increase the in situ conversion rate of Xinjiang cotton from the present 29% to 70%, and subsidize the cotton tariff in Xinjiang for more advanced processing products such as cotton yarn and cotton cloth, and increase subsidies to promote industrial integration and promote coordinated development. To help Xinjiang develop the textile and garment industry, promote the smooth implementation of the employment strategy for millions of people, solve the employment problems of minority nationalities in southern Xinjiang, and promote social stability and long-term stability.