After two seasons, it has become quite clear that Chinese farmers regard the government cottonseed subsidy scheme as an important incentive to plant cotton. Under the subsidy plan, the government will, in effect, cover the cost of high-quality cottonseed to the growers with the purpose of stimulating production and use of better high-quality cotton varieties in each region. The government approves which local seed varieties are best suited for each location and certifies its eligibility for the subsidy. Then, it allows local seed supply companies to tender for participation in the program, as in Shandong where a total of 20 seed supply companies were successful in their bids to supply seed to the provincial growers. The program encourages the use of one seed variety per village, with the Agricultural Bureau aiding local farmers in the benefits of the new seed varieties. Shandong Province, the largest cotton-producing region in the North China Plain, has been allocated a total of 15.75 million yuan under the new plan. It is estimated that 40 percent of all Shandong 2008 cotton acreage will benefit from the subsidy scheme. In Anhui Province, 133,333 hectares have been approved to receive the cottonseed subsidy during the 2008/09 season -- 27 seed varieties have been approved.

Source：Globecotnews