Study On Cotton Credit Risk In Agriculture Development Bank Of Xinjiang Under Target Price Reform Policy

In April 2014, the state cancelled a temporary policy which was adopted to collect cotton reserve in the past three years, aiming to do the experimental reform concerning with implementing target price of cotton in order to protect the interests of cotton producer and production enthusiasm, accelerate cotton market reform, transforming the price system dominated by policy into market adjusted price. In doing so, the purchase of cotton and cotton processing enterprises can be directly connected to the market. This means the cotton industry will be faced with more challenges and risks. The risks of management and market the cotton enterprises are faced with are increasing, thus aggravating the risk of credit fund issued from Agricultural Development Bank of Xinjiang(ADBX). The contradiction of “guarantee the purchase of cotton” and “risk prevention” stands out.This paper introduces the subject of the national cotton price reform policy content, ADBX as well as the background and development process of cotton price target of reform under the condition of the bank credit policy adjustment in Xinjiang, to clarify ADBX as the only policy financial institution in Xinjiang, mainly undertaking policy credit support tasks, increasing farmers’ income, maintaining frontier in such aspects as social stability and promoting economic development. ADBX will play an irreplaceable role, and will be of great significance to realize our country cotton industry security, promote leapfrog development and lasting stability in Xinjiang. Therefore, to ensure the sustainable development of cotton industry in Xinjiang, to ensure the safety of the bank credit funds cotton in Xinjiang, it is very important to guard against credit risk. The research paper,guided by the theory of risk management, comprehensive historical data, analytical data, charts and from our country agriculture policy of four kinds of forms of credit risk, elaborated upon how to reduce policy risk, management risk, market risk and operating risk, analyzed the nature and causation of credit risk of ADBX concerning target price reform of the state, and probed into the adapted strategies in managing agriculture policy bank. Suggestions are put forward to enable ABDX to play its role in the development of cotton industry in Xinjiang, and they may be helpful to closed operation of funds and strategic security of sustainable development of cotton industry in Xinjiang.