Cotton is an important strategic crop. Many of the policies and reform programs were conducted in the agricultural sector during the past three decades from 1987 to 2011. The study aimed at investigate the level of the economic efficiency and productive performance of cotton and encourage farmers to increase the area cultivated with cotton.The study used two main sources of data: published secondary data and primary data .The study used a descriptive and quantitative as analytical statistical methods. The results of the study showed that: Policies and economic reform programs of cotton (1987-2011) caused some changes in the structure of production costs .The economic efficiency indicators (total revenue, total costs, net income, gross margin) showed continuous increase during the different stages of economic reform .While the indicators (net return on the pound spent, the percentage of total revenue to the total costs and the percentage of total revenue to variable costs) increased during the (1987-1993), (1994-1997). and decreased during the period of economic liberalization (1998-2011) . There is a positive and statistically significant relationship between cotton cultivated area in the current year and cotton price in the previous year. While there is negative and statistically significant relationship between cotton cultivated area in the current year and rice cultivated area and maize price in the previous year. Problems and determinants of cotton cultivation: difficulty of selling cotton and greed merchants, increased production costs compared with the prices, neighbours didn't cultivate cotton. Suggestions to encourage cotton cultivation: Return to collection centers system of cotton in villages, providing motivational agricultural services to farmers and encourage the friendly agricultural cycle. Depending on the results, the study suggested the following recommendations:1- Study the effects of the policies and economic reform programs for the agricultural sector in general and especially for cotton and encourage positive ones, and develop appropriate solutions to the negative ones .2- Importance perform of the agricultural cooperatives an active role through the provision of agricultural inputs and assistance in marketing cotton crop .