Cotton Farmers Should Also Share Market Risks.

Recently, the vice premier of the State Council, Wang Yang, went to Xinjiang to carry out the pilot project of cotton target price reform.

He pointed out that carrying out the pilot project of cotton target price reform can help explore and improve the price formation mechanism of agricultural products, better play the role of market allocation of resources, and make full estimation and adequate preparation for the problems that may arise in the pilot process.

According to the Ministry of agriculture, the target price level is determined by the method of production cost plus basic income at the pilot stage.

The target price only ensures that farmers get basic income instead of all proceeds. When the market price falls, farmers also have to bear some risk of falling profits.

Wu Xinnan, deputy inspector of the development and Reform Commission of the Xinjiang Construction Corps, formulated the rules for the implementation of the rules, and said that the government should not interfere in the market price, and the government would not intervene in the market price. The acquisition of the market price would help restore the vitality of the domestic industry and enhance the market competitiveness of domestic agricultural products. The subsidy method of the government should be changed from the "covert subsidy" contained in the price to the "direct subsidy" of direct payment, so that the producers could get the government subsidies in a clear way, which would help to reduce the intermediate links and improve the efficiency of subsidies.

At the same time, it is also conducive to improving the organization and scale of agricultural production, improving labor productivity, encouraging agricultural technological progress, controlling production costs and improving products.

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"The pilot project of cotton target price reform can help explore and improve the price formation mechanism of agricultural products and better play the role of market allocation of resources."

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Wang visited the planting farmers, cotton storage and textile enterprises, and stressed that the next step would be to increase the pparency of cotton imports and cotton reserves so as to stabilize market expectations.

"There must be risks in market activities.

It is the main body of the market economy, while gaining profits through the market, it must also take the risk of market fluctuation.

Li Guoxiang said, because the state is subsidized according to the average price of cotton in the Xinjiang market, instead of subsidizing the price according to the actual selling price of a single farmer.

Therefore, if the quality of cotton produced by cotton growers is superior and the selling price is higher than the average price, the total income of cotton growers will naturally be more. On the contrary, it will be less. In most industries, market risks are all borne by the market players. But considering the particularity of cotton production, the State implements the target price policy and shares risks with farmers, so as to promote the healthy development of the whole cotton industry.