How to Scientifically View the Tight-Balance Regulation of Agricultural Product Supply and Demand
Research on the current agricultural situation often cannot avoid judgments about the supply and demand situation of agricultural products. A relatively popular judgment is that the supply and demand of grain or major agricultural products in China is currently in a state of tight balance, and that this tight balance will become the norm or the new normal. We believe that this view's understanding of the tight balance of agricultural product supply and demand is open to question, does not conform to the actual supply and demand relationship of grain or major agricultural products in China, and can easily mislead decision-making. At present, implementing tight-balance regulation of agricultural product supply and demand is crucially important, but it is necessary to accurately understand the meaning of the tight balance of agricultural product supply and demand and strive to raise the scientific level of decision-making.
Accurately Understanding the Meaning of the “Tight Balance” of Agricultural Product Supply and Demand
Tight balance is a concept corresponding to loose balance. So-called tight balance of supply and demand, simply put, is a state in which supply and demand are basically balanced, but supply is relatively tight in meeting demand. In other words, the tight balance of supply and demand is when supply is slightly less than demand, but on the whole does not substantially hinder the satisfaction of effective social demand, similar to "eating until eighty percent full."
(1) Tight balance is the ideal state and maximum possible state of China's overall agricultural product supply and demand relationship under existing resource and environmental constraints
From the current and even medium- and long-term trend, with population growth, economic development and rising income levels of urban and rural residents, the total social demand for agricultural products continues to grow, causing the demand of agricultural development for resources and the environment to continuously expand; the diversification of the demand structure for agricultural products and the advancement of agricultural multifunctionality will also create new demands on agricultural resources and the environment.
At the same time, with the advancement of industrialization, informatization, urbanization, agricultural modernization and greening, on the one hand, the contradiction between industrialization, informatization, urbanization, greening and agricultural modernization competing for resources will become increasingly fierce, and the requirements for transforming the mode of agricultural resource utilization and raising the quality of agricultural resource utilization will continuously increase, causing the availability of factors such as land, capital, labor and even talent for agricultural development to show a declining trend in proportion; on the other hand, the resource and factor costs and opportunity costs of agricultural development are rising rapidly, causing the costs of agricultural products and the opportunity costs of agricultural development to be rapidly pushed up. In addition, in recent years, ecological damage problems related to agriculture, such as degradation of cultivated land quality, worsening environmental pollution, and worsening groundwater funnels, have become increasingly prominent, increasing the difficulty of safeguarding food safety and the urgency of enhancing the capacity for sustainable agricultural development, and also raising the social costs of agricultural development. Problems of this kind all increase the difficulty and risk of increasing the effective supply of agricultural products.
Weighing both sides of agricultural product supply and demand comprehensively, at present and even in the medium and long term, if attention is not paid to accelerating the transformation of the agricultural development mode, the resource and environmental constraints facing China's agricultural development will show a tightening trend; existing resource and environmental constraints determine that tight balance is very likely the ideal state and maximum possible state of China's overall agricultural product supply and demand relationship, and it will be difficult to ensure that China's agricultural product supply and demand is generally in a "loose balance" or oversupply state. In recent years, the large increase in China's net imports of agricultural products and the rapid expansion of the agricultural product international trade deficit have provided a good annotation for this.
(2) Tight balance is also the target model for the management of China's major agricultural product supply and demand relationship and market regulation
The tight balance of agricultural product supply and demand is different both from the loose balance of agricultural product supply and demand and from the imbalance of agricultural product supply and demand. Under the loose balance state of agricultural product supply and demand, agricultural product supply and demand are basically balanced, but supply is slightly greater than demand. Relative to the tight balance state of agricultural product supply and demand, the loose balance of agricultural product supply and demand easily leads to falling prices of agricultural products, damaging the production and operation enthusiasm of farmers or the interests of the circulation segment; it also easily increases the resource and environmental demands of agricultural development and increases the possibility of creating agricultural resource and environmental problems.
The imbalance of agricultural product supply and demand includes two states: oversupply and undersupply of agricultural products. Relative to the tight balance of agricultural product supply and demand, the problems brought by oversupply of agricultural products are consistent in direction with the loose balance of agricultural product supply and demand, but more serious in degree; undersupply of agricultural products often pushes up the prices of agricultural products and easily affects the satisfaction of the consumption needs of urban residents, especially low-income urban residents.
Under the tight balance state of agricultural product supply and demand, the problems of the loose balance of agricultural product supply and demand can be avoided, and the problems of the imbalance of agricultural product supply and demand can also be avoided, and the interests of agricultural product producers, circulators and consumers can be better balanced. Therefore, the tight balance of agricultural product supply and demand should be the target model and ideal state of China's market regulation of grain or major agricultural products.
(3) The tight balance of agricultural product supply and demand is in fact a fragile, temporary and abnormal balance
The tight balance of agricultural product supply and demand is often not a stable balance, but a balance with a relatively fragile foundation, a balance in which the supply and demand balance relationship is easily shaken. This is especially true of the tight balance of supply and demand for specific agricultural products such as grain. At the starting point of the tight balance of supply and demand, if the growth of supply cannot keep pace with the growth of demand; or while demand remains stable, the foundation supporting supply to reach a certain level is shaken, the supply and demand balance relationship is easily destroyed, forming a transformation from "tight balance" to "imbalance." Therefore, in the medium and long term, changes in the demand for agricultural products and the strengthening of demand substitution effects among different types of agricultural products, and the rise in demand for agricultural multifunctionality; in the short and medium term, the rise in production and circulation costs and opportunity costs of agricultural products brought about by changes in the market or price environment, the decline in the availability of agricultural resources and factors brought about by resource competition between agriculture and cities and non-agricultural industries, and ecological damage problems in local areas may all become driving factors for the transformation of agricultural product supply and demand from tight balance to imbalance. Under market economy conditions, the imbalance of agricultural product supply and demand is frequent, and balance is temporary. The tight balance of agricultural product supply and demand is mainly realized in dynamic fluctuations through the spontaneous regulation of the supply and demand relationship by the market, supplemented by effective policy guidance and macro-control.
In the management of China's agricultural product supply and demand relationship and market regulation, achieving the tight balance of grain or major agricultural product supply and demand can only be a target model and ideal state, and does not belong to the norm or new normal. If the tight balance is described as the norm or new normal of China's grain or major agricultural product supply and demand relationship, it not only does not conform to the actual supply and demand relationship of grain or major agricultural products in China, but also easily causes misleading, making people mistakenly believe that at present or in the future, whether in general or in specific types of major agricultural products, the tight balance can always be easily achieved, thereby belittling the importance and urgency of implementing tight-balance regulation of agricultural product supply and demand, and increasing the possibility of a loose balance or imbalance of agricultural product supply and demand.