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The Impact of Target Price Policy on Cotton Cultivation: Analysis of County-Level Panel Data from China

Author

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  • Wei Wang

    (Department of Agriculture and Forestry Economics and Management, College of Management, Sichuan Agricultural University, 211 Huimin Rd., Chengdu 130062, China)

  • Chongmei Zhang

    (Department of Agriculture and Forestry Economics and Management, College of Management, Sichuan Agricultural University, 211 Huimin Rd., Chengdu 130062, China)

  • Jiahao Song

    (Department of Rural and Regional Development, College of Management, Sichuan Agricultural University, 211 Huimin Rd., Chengdu 130062, China)

  • Dingde Xu

    (Sichuan Center for Rural Development Research, College of Management, Sichuan Agricultural University, 211 Huimin Rd., Chengdu 130062, China)

Abstract

China is an important cotton production area in the world. Since 2014, China has implemented a cotton target price subsidy policy in Xinjiang for 7 years. As the policy implementation time has lengthened, some deep-seated problems have started to emerge. Therefore, it is necessary to summarize and evaluate to clarify the future policy direction of the cotton target price subsidy policy. Based on county-level panel data of Xinjiang and Shandong from 2011 to 2018, this paper used the Propensity Score Matching—Difference in Difference method to analyze the impact of the implementation of cotton target price subsidy policy on cotton planting in Xinjiang. The results showed that: (1) after the implementation of the cotton target price subsidy policy, cotton production was stimulated by the transition, cotton producers’ enthusiasm for cotton production was higher, cotton production increased rapidly, and the yield per unit area decreased, indicating that there was a ’bubble’ in cotton cultivation. (2) The target price subsidy policy mainly achieves the expansion of the cotton planting scale by reducing the area of competitive crops. In view of the above research conclusions, this paper further explains its policy implications. It is proposed that the future cotton target price level should be formulated to fully consider the comparative benefits between different crops, to restrict the subjects that enjoy subsidies and the upper limit of subsidies, and strictly implement the concept of green development; it is necessary to guide cotton production out of ecologically vulnerable areas.

Suggested Citation

  • Wei Wang & Chongmei Zhang & Jiahao Song & Dingde Xu, 2021. "The Impact of Target Price Policy on Cotton Cultivation: Analysis of County-Level Panel Data from China," Agriculture, MDPI, vol. 11(10), pages 1-18, October.
    • Handle: RePEc:gam:jagris:v:11:y:2021:i:10:p:988-:d:653077
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    1. Lantong Shao & Jiaqin Gong & Wenqing Fan & Zongyi Zhang & Meng Zhang, 2022. "Cost Comparison between Digital Management and Traditional Management of Cotton Fields—Evidence from Cotton Fields in Xinjiang, China," Agriculture, MDPI, vol. 12(8), pages 1-18, July.
    2. Xiaoxiao Li & Bo Wang & Lingyan Sun & Honghui Zhu & Ning Lv & Jiaqi Zhang, 2023. "The Transmission Effect Test of China’s Rotation Mechanism on the Cotton Reserve Market," Sustainability, MDPI, vol. 15(5), pages 1-17, February.
    3. Genjin Sun & Yanxiu Liu & Yurong Zhu, 2024. "Target price policy and rural household income: Evidence from China," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 70(5), pages 226-243.
    4. Zhengjie Zhang & Jiahao Song & Caixia Yan & Dingde Xu & Wei Wang, 2022. "Rural Household Differentiation and Poverty Vulnerability: An Empirical Analysis Based on the Field Survey in Hubei, China," IJERPH, MDPI, vol. 19(8), pages 1-15, April.

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