Support Policies And Industry Development Of Cotton Industry In Shandong Province

As a kind of strategic material concerning national economy and the people’s livelihood, cotton which is the second most important crop next to grain and a main economic crop in rural China, plays a crucial role in national economic development. Cotton has been the longest industrial chain among all field economic crops and been cultivated by a total of 23 provinces, nationwide. The production of cotton not only is an important income source of 300 million cotton farmers but also has a great impact on employment of 18 million workers in textile industry and on welfare of thousands of customers, at the same time matters the development of textile and garment industry as well as the stability of national economy.For decades, with the rapid development of cotton industry, the cotton market economic system has been basically established. Meanwhile, cotton production and the income of cotton farmers increased dramatically, making China become the largest cotton producing, consuming and importing country. However, there are still some deficiencies in our country’s cotton industry, including production instability, miscellany and variability in cotton seed, small size and large quantity of cotton enterprises and disorder in market circulation.Recently, in order to ensure national food security, our government implements a series of measures and policies to stimulate grain production. These measures and policies are mainly composed of several subsidy policies such as improved seed subsidy, direct grain subsidy, farm machine subsidy, comprehensive agricultural subsidy and large grain production county subsidy, and other policies like the setting the minimum purchasing price for grain and temporary grain purchase and storage policy. Whereas, there is no policy, especially those from which cotton farmers could well benefit, has been implemented on cotton production or circulation. As a result, cotton farmers’ economic interest has been violated, leading to dramatic decrease in cotton plantation area. These all have negative impact on the sustained, healthy and stable development of cotton industry.Shandong province is located in warm temperature zone and belongs to a mainland monsoon type climate, with moderate rainfall and enough heat. Landscapes in Shandong province dominate by plains and hills, and its western part is situated in the Yellow River Alluvial Plain where soil is mainly calcareous alluvial soil. Benefiting from these human resource and natural advantages, Shandong province has become the second cotton producer in China. Meanwhile, Shandong province is also a heavy cotton consumer who exceeded Jiangsu province and became the first textile province in China in year 2004. Unfortunately, cotton industry in Shandong province has been experiencing frequent upheavals, especially in plantation area aspect where the maximum fluctuation ratio between adjacent years is 58.7% and minimum one is 4.5%.In our study, the cotton industry status in Shandong province, as well as various supporting policies our government has implemented in order to stimulate cotton production such as cotton improved seeds policy and cotton producers subsidy, have been presented. Subsequently, we analyzed the effect of these policies on development of cotton production in Shandong province and compared the differences among these policies. Based on our works, we proposed several suggestions for the government on their policymaking on cotton industry.