The Xinjiang Production Corps, a giant quasi-military farm and industrial operation in China's far northwest, is China's biggest producer of cotton. In the 1990s, production was expanded rapidly in this arid region. But now it appears that this level of production is unsustainable, and the Corps is planning to cut back cotton acreage and expand production of grain, livestock, and fruit.
The government may be growing impatient with the subsidies needed to support production and transport it to eastern China where most of the factories are. Xinjiang has been hit hard by the current economic crisis. A reporter learned from Xinjiang departments that the production corps' sales of cotton this year were only a fourth of sales last year at this time, if sales to government reserves are excluded.
According to a Feb. 1 article from China Cotton Association, in 2008, the corps' cotton production was 1.3 mmt, one-sixth of the national output. Cotton accounts for 60% of income for the corps' employees and over half of the corps' profits.
However, profits are declining as costs rise. In the long-term soil fertility will decline due to the monoculture. Plastic mulch is causing pollution. The large scale farming is leading to water shortages in this arid region. Conflicts over water are causing structural change in production. The current economic crisis has revealed the poor operation of many Corps farms, economic costs, and rising bank loans.
The Corps party committee held a conference to discuss re-aligning production to "reduce cotton, increase grain, livestock, and fruit." In 3 years, the Corps' cotton area is targeted to be reduced from 8.5 million mu to 6.5 million mu.
At the meeting, the "comrades" agreed that reducing cotton doesn't mean the Corps has to give up its cotton industry. Less cotton will be planted on risky and low-yielding fields. The Corps will concentrated on maintaining production on the nationally-designated high-quality cotton areas.
A worker from Division 131 says, "Before, we planted cotton as soon as winter was over and harvested it before winter set in again, with high risk and cost. Last year, I planted soybeans which have lower cost and require less labor. I earned 300 yuan more per mu than I would have gotten from cotton."
Last year, the Corps decreased cotton area by 800,000 mu, but production was still 1.3 mmt. Yield was up 4.2%. This year, an official of the Corps' agricultural bureau says that Divisions' targets entail a reduction of 1 million mu.