Cotton Target Price for Xinjiang in 2014 Announced
Source:China Cotton Association Date: 09/April/2014
According to State Council document No.1 in 2014, the cotton target price trial will be practiced in Xinjiang. Recently, the target price of 19,800 Yuan per ton for standard quality cotton in 2014 was approved and announced by National Development and Reform Commission, Ministry of Finance and Ministry of Agriculture jointly.
Since 2011 season, temporary cotton reserve policy was implemented to support domestic cotton production and protect cotton growers’ interest. As international cotton market price declined continually, comparatively much lower import cotton price and high state cotton stock put heavy pressure on market. The cotton target price trial helps to decouple the agriculture product price forming system with government subsidy, thus to empower the market.
The target price is based on market price of the agriculture product and protects the growers via differential subsidy. Under the cotton target price, reserve purchase will be cancelled; growers sell cotton at market price. When the market price is lower than target price, subsidy will be granted to growers in trial regions according to the market and target price gap, planting acreage, output or quantity of sale; when the market price is higher than target price, no subsidy will be provided to growers. Practice details on subsidy delivery shall be decided and announced to public by local government.
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