China ties cotton subsidies to water use, pushing farmers out of dry regions

China's central planners will continue to subsidize cotton production in Xinjiang for another three years. But they will now direct farmers to grow less cotton in areas with water shortages.

For years, China's cotton subsidies focused on ensuring stable income for farmers and national supply. Now, the government is explicitly linking where cotton can be grown to local water resources, especially groundwater. This means local governments will have to manage planting areas more actively, pushing farmers in water-stressed regions to switch crops or stop growing cotton.