A:the target price policy is intended to send a price signal to guide the market expectations on the basis of market-driven formation of prices of agricultural products, an agricultural support policy created to preserve the security of raw materials industry and protect the interests of producers through price subsidy. The pilot program of target price reform has three key elements: first, cancellation of the temporary cotton stocking policy across the country to the extent that government will leave the cotton price to the market and producers will sell cotton at market price. Second, the target price subsidy will be tried out first in Xinjiang. Target price of cotton will be published before planting of cotton. When the market price falls below the target price, the government will give subsidy to producers in the pilot areas based on the difference between target price and market price. Otherwise, no subsidy will be given. Third, the amount of target price subsidy will be linked with the cotton acreage, output or sales volume.

A:There are mainly two differences: first, most of existing agricultural subsidies are given based on taxable acreage, regardless of whether crops are planted or what crops are planted. It is a universally accessible subsidy. Target price subsidy will be linked with the actual acreage or output or sales volume of crops in a proportional manner. Second, the existing subsidies are relatively fixed in value and given on a yearly basis. The target price subsidy will be linked with market price and will be given only when the market price falls below the target price. The greater the difference, the more the subsidy will be given.

A: At the trial period, target price is fixed using production cost plus basic earnings. This is done in light of the agricultural dynamics and the need to protect interests of farmers and to achieve a greater role of the market. First, it can better protect the interests of farmers. The production cost plus basic earnings method accommodate the current situation where the production costs of agricultural products in today's China has been on rise. No matter how the market prices and production costs will change, it can always ensure that cotton growers will be paid for their efforts and no significant decrease in cotton output will occur. Second, it helps leverage the role of market mechanism. Market activities are risky in nature. Farmers, as the players in the market economy, have to deal with the risks of market fluctuation while gaining income through market. In most sectors, market risks are all on the head of market participants. Given the special nature of agricultural production, the government should give appropriate protection to the production of a number of important agricultural products, but not to the extent that all market risks fall on the head of the government. Therefore, target price is intended to ensure farmers will receive basic earnings, but not all benefits. When the market price falls, farmers need to deal with the risks of decrease in some of their incomes. This way, the market mechanism can be called into full play in order to guide farmers towards a reasonable product mix and improve the agricultural productivity and resistance to risks.

A: at the pilot stage, the target price will be fixed once a year in order to make timely adjustment when necessary. The target price will be published before sowing in order to send a clear signal to farmers and market and guide farmers towards reasonable product mix and arrangements for agricultural production. The target price for the same variety is consistent across all pilot areas. A flat rate is adopted across Xinjiang.

A: When the market price falls below the target price, the target price subsidy will be given to farmers. The market price corresponding to the target price is the average market price across Xinjiang during the price-setting period. 1. Price-setting process: the price at which cotton mills purchase seed cotton will be identified as the market price, instead of the price at which farmers sell their cotton right besides their fields, mainly because representative samples are hard to find from agricultural products directly sold besides the fields due to the substantial difference in moisture and purity contents, making it difficult to ensure the accuracy of price data. 2. Price indicator: the market price of cotton is the price at which cotton mills purchase seed cotton for conversion to prices of ginned cotton. The authorities calculate the price of seed-cotton-converted ginned cotton using the following formula based on the monitored prices of seed cotton, prices of cotton seeds and lint percentage. Price of lint equivalent seed cotton price =[price of seed cotton –price of cotton seed x (1-ginning outturn)]/ginning outturn + processing costs 3. Price-setting period. The price-setting period is from September to November during which cotton is marketed in a centralized manner. According to historical experience, before implementation of the temporary stocking policy, the cotton sales volume during the price-setting period accounted for about 85% of the annual sales volume, a figure that can substantially represent the actual selling price in the pilot areas. 4. Determination process. The market price is monitored by competent authorities and is determined on a province-by-province basis, that is, market price is determined according to the average price level across the province under monitoring, instead of the actual selling price offered by individual farmer households.

A: The target price subsidy will be given to cotton growers in pilot areas, generally based on the cotton acreage.
The April 5 target price policy provides that when the market price falls below the target price, the government will give subsidy to cotton growers in pilot areas based on the price difference and cotton acreage, output and sales volume. Of course, this is also dependent upon the specific implementing rules in the pilot provinces so as to ensure the subsidy from the central government will be given to cotton growers in time and in full. 
 Since the market price to which the target price corresponds is an average price, the amount of subsidy given to cotton growers is calculated based on the difference between target price and average market price. If the realized price of cotton growers is higher than average market price, the actual income they receive will be more. Therefore, farmers need to improve the quality of cotton as much as possible and make every effort to sell their products for a higher price in light of the market dynamics. 

 A: the amount of target price subsidy is the difference between the target price of 19800 Yuan/t and the average market price. Assuming an average market price of 15800 Yuan/t, the subsidy will be 4000 Yuan, or 2 Yuan per kg of seed cotton, that is to say, when the market price reaches 15800 Yuan/t, cotton growers will get 4 Yuan subsidy for each kg of seed cotton they sell to the state, regardless of the selling price. If cotton growers sell seed cotton in favor of acquirer companies, the government will not consider this portion of loss. therefore, it is advisable for cotton growers to take the following three measures in order to generate more income, first, improve production management for greater output and higher quality; second, grade and classify cotton when harvesting to ensure the profitability of high-grade cotton; third, know more about the subsidy policy, do not undersell their cotton but bargain the price based on the quality of cotton.


A: From the method for calculation of target price subsidy and the answer to the aforesaid question of the difference between target price subsidy and existing agricultural subsidies, it can be seen that the government will give cotton growers a subsidy in an amount of the difference between average market price and target price according to the government policy. In addition, according to the policy statement that pilot program of target price reform will be pursued to separate the agricultural product price formation mechanism from the government subsidy with a view to leveraging the decisive role of market in resource allocation while protecting the interests of farmers and leaving the price formation to the care of the market for coordination along the value chain, when the market price fluctuates dramatically, the government will stick to its commitment to letting the market determine the price.