On March 17, the National Development and Reform Commission and the Ministry of Finance jointly issued the “Notice on Deepening the Reform of Cotton Target Price”, which determined that the cotton target price level will be fixed for three years. The target price level of Xinjiang cotton from 2017 to 2019 is 18,600 yuan per ton. If there are major changes in the cotton market during the pricing cycle, the target price level can be adjusted in a timely manner after submitting to the State Council for approval.
It is reported that from 2014 to 2016, the country launched a three-year cotton target price reform pilot in Xinjiang, which achieved remarkable results. The pilot has now ended. The National Development and Reform Commission and the Ministry of Finance have made a comprehensive summary of the pilot situation and entrusted relevant The agency conducted a third-party independent assessment, and on this basis, put forward opinions on deepening the cotton target price reform. In accordance with the spirit of the 2017 Central Committee Document No. 1 on “Adjusting and improving Xinjiang’s cotton target price policy and improving subsidy methods”, with the approval of the State Council, we will deepen the cotton target price reform in Xinjiang from 2017 and further improve the target price policy.
Not only have the target price formation mechanism and pricing cycle been improved, but the subsidy method has also been optimized. The notice pointed out that the amount of cotton that enjoys target price subsidies in Xinjiang is subject to upper limit management, and any cotton that exceeds the upper limit will not be subsidized. The upper limit of the subsidy amount is 85% of the national average cotton production in the base period (2012-2014). This setting is in line with the World Trade Organization’s blue box policy regulations. In terms of subsidy amount, the yellow box policy is changed to be constrained by the upper limit of the subsidy amount.
According to data from the National Bureau of Statistics, the national cotton output from 2012 to 2014 was 6.836 million tons, 6.299 million tons, and 6.178 million tons respectively. Based on this calculation, the upper limit of the subsidy amount is 5.47 million tons, which is higher than the national cotton market monitoring system for Xinjiang in 2016. Cotton production forecast. ˆ
In order to help everyone better understand this cotton target price reform, the National Development and Reform Commission has answered questions of concern to all aspects of society. The following excerpts are as follows:
Q: How effective is the pilot cotton target price reform?
Answer: After three years of practice, the cotton target price reform pilot has completed its set tasks and achieved strategic adjustments to the national cotton production layout.
1. The price of cotton is completely determined by market supply and demand, and the price difference between domestic and foreign cotton has narrowed significantly. ˆ
2. The interests of farmers are effectively protected, and farmers can maintain their capital and make profits by planting cotton despite a sharp drop in market prices. ˆ
3. The supply structure has been significantly optimized. Xinjiang’s high-quality cotton production has increased its share of domestic production from 56% before the reform to 67%, and sub-optimal cotton areas have gradually withdrawn from production. Cotton quality has steadily improved. In 2016, Xinjiang cotton with a diameter of 28 mm and above accounted for 93.5%. , an increase of 18.4 percentage points compared with before the pilot; the national reserve cotton inventory has dropped significantly, and the effect of destocking is obvious.
4. The upstream and downstream market awareness of the industry has increased. Farmers pay more attention to marketability when choosing cotton seeds, and ginners pay more attention to subdivided grades to meet textile needs.
5. The efficiency of the textile industry has improved and its competitiveness has been enhanced. In the first half of 2016, the textile industry achieved a total profit of 94.4 billion yuan, a year-on-year increase of 7.5%.
6. A precise subsidy mechanism has been established to directly distribute national special subsidy funds to actual cotton growers, and effectively supervise the entire subsidy process, greatly improving subsidy efficiency.
7. Promote the economic and social development of Xinjiang. The reform pilot has ensured the income of cotton farmers and driven the growth of investment and employment in Xinjiang’s textile industry. The investment in fixed assets in three years has exceeded 90 billion yuan, exceeding the total investment from 1978 to 2013, and created 189,000 new jobs. The number of people increased by 1.4 times compared with before the reform.
Q: Why should we deepen the cotton target price reform?
Answer: While the reform pilot has achieved results, it has also exposed some contradictions and problems. The main ones are: policy expectations are unstable. Farmers and cotton-related enterprises are worried about whether the target price policy will continue to be implemented after the pilot is over. They also hope that the target price formation mechanism will be more stable. Transparent; the target price must be too frequent in a year, which is not conducive to stabilizing the expectations of all parties and maintaining stable cotton production; the subsidy method is not scientific and reasonable. In order to solve the problems existing in the reform pilot, further promote the structural reform of the cotton supply side, stabilize the income and planting enthusiasm of cotton farmers, build a high-quality cotton production base in Xinjiang, enhance the competitiveness of the domestic cotton industry, and promote the sustainable and healthy development of the cotton textile industry, it is necessary to further deepen the Reform the cotton target price and improve relevant policies.
Q: How to organize and implement the reform work?
Answer: Relevant departments will do a good job in setting target price levels, monitoring and determining market prices, calculating and allocating subsidy funds, guiding cotton production technology, surveying and statistics of cotton planting area and output, organizing cotton enterprises to actively purchase and sell, strengthen coordination and cooperation, and improve working mechanisms. , coordinate and solve problems that arise during the reform process. At the same time, the Xinjiang Autonomous Region and Xinjiang Production and Construction Corps are guided to combine local realities to formulate specific implementation plans and implement them conscientiously to ensure that subsidy funds are sent to actual cotton growers in a timely and full amount, and take advantage of the opportunity of deepening the target price reform to follow the “control…”area, reduce costs, improve quality and efficiency, and guarantee capabilities” to enhance the competitiveness of Xinjiang’s cotton industry and build a high-quality cotton production base in Xinjiang. The National Development and Reform Commission will continue to track the progress of the reform and carry out monitoring and evaluation with relevant departments and regions. Improve the target price policy in a timely manner.
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