Comparative Study On Cotton Subsidy Policies Of China And America

The United States gains competitive advantages over China, relying on high cotton subsidies. While cotton planting area in China is shrinking, cotton production is confronted with sever situation. It is essential to improve cotton subsidy policies to protect cotton planters' interests and stable supply of cotton production.Compared with China, American cotton subsid y policy has a long history, forming a relatively mature system. By means of comparative study of subsidy standards, mechanisms, ranges and targets between China and US, we can find deficiency of Chinese cotton subsidies, including failing to take fairness and efficiency into account, imperfect subsidy mechanism, unreasonable subsidy structure and insufficient green box policies.Based on the experience of the American cotton subs idy policies, C hina should be constantly improved in the following ways:(1) According to the WTO commitments, the cotton target price will be lowered. When making cotton target price index, the government should keep away from excessive subsidies, which lead to unlimited expansion of cotton planting areas and unreasonable planting structure. The subsidies can't be too low to distress cotton planters, affecting the global superpower of cotton production and social stability.(2) Then, increase capital investment in “Green Box' policies, and enrich green box measures. Increase subsidy programs and subsidies to improve the overall competitiveness of C hinese cotton. Do a good job technical support. Add subsidies on the government general services, such as, research, pest control, training, promotion and consulting.(3) Formulate subsidy policies and implement the interactive mechanism. Ensure that the government, cotton planters, cotton mills and stakeholders participate in the decisionmaking process. Analyze the feedback of all kinds of cotton supporting policies to adjust and improve the existing subsidy policies constantly. Ensure policies publicity and transparency so that stakeholders understa nd, and support to execute the subsidy policies. Finally, the cotton planters' satisfaction with cotton subsidy policies will be enhanced.