Impact of Target Price Policy on Cotton Total Factor Productivity: A Case Study of Xinjiang

The cotton Total Factor Productivity (TFP) was measured and the impact of target price subsidy policy on cotton TFP in Xinjiang was evaluated based on DEA-Tobit approach. The results show that the cotton TFP in Xinjiang was increased during 2014—2017 period, and the technological progress was the main driving factor; there are big difference among South, North and East Xinjiang in cotton TFP; the target price subsidy had a significant effect on the cotton TFP in Xinjiang; The target price subsidy enhances cotton TFP by affecting the pure technical efficiency and scale efficiency, but has no effect on the technological progress; subject to the farmer's funds and resource endowment, the area subsidy has no effect on the scale efficiency; the regional economic development, household production scale, and net profit have significant positive impacts on TFP and technological progress. It is suggested that the target price policy optimization in the future can be considered to convert some subsidies into green box policies, such as supporting farmland infrastructure, land transfer, social services, etc., to solve the short-board problem in the promotion of cotton TFP, and to promote the transformation and upgrading of cotton production in Xinjiang.