Accelerated reform of agricultural product prices will drive the marketization of China's agriculture
Recently, the Central Committee of the Communist Party of China and the State Council issued the "Several Opinions on Advancing Price Mechanism Reform" (hereinafter referred to as the "Opinions"). The "Opinions" pointed out that the price formation mechanism for agricultural products must be improved, with agricultural product prices mainly determined by the market.
Zheng Yujie, a researcher in agriculture, forestry and animal husbandry at China Investment Advisor, said in an interview with a Securities Daily reporter that the marketization of agricultural products is a necessary condition for achieving agricultural modernization, and that agricultural product price reform is a major measure to drive the marketization of China's agriculture.
“The reform can improve the sensitivity of China's agricultural product prices to market responses and strengthen the link between agricultural product prices and the international agricultural product market. It is the path China's agriculture must take to become internationalized. At the same time, the government's encouragement of pilot programs for agricultural product price insurance is a major feat in the field of modern agricultural finance, and it is of great significance for improving agriculture's ability to withstand risks and driving agricultural modernization.” Zheng Yujie said.
Meierya Futures' relevant person in charge said that China's agricultural product price regulation policy has ushered in a historic adjustment. It was recently learned from the Ministry of Agriculture that, regarding the direction of the next step in agricultural product price reform, the state has determined to implement differentiated support policies for different varieties, and will focus on giving play to the decisive role of the market in price formation, guiding production through market price signals, and regulating supply and demand.
Xu Kunlin, Director of the Price Department of the National Development and Reform Commission, said that liberalizing agricultural product prices does not mean the government will no longer manage them. Agricultural product prices are formed entirely by the market, and there are no government pricing items. However, after liberalization, the government will adopt various means and measures to stabilize agricultural production, protect farmers' enthusiasm for production, and increase farmers' income.
“When market prices are too low and farmers' income is affected, the state adopts the method of target price subsidies so that they can have a certain return on the basis of covering costs.” Xu Kunlin said.
Song Jiening, a researcher in agriculture, forestry and animal husbandry at China Investment Advisor, said in an interview with a Securities Daily reporter that the formation of the agricultural product price mechanism makes agricultural product prices determined by the market, and together with the advancement of state-owned enterprise reform, this has a relatively large driving effect on the development of related listed enterprises. The scale effect brought by land transfer and the benefits brought by agricultural product price reform will promote development in product fields with relatively high demand elasticity, relatively long industrial chains, and relatively high linkage with domestic and international markets, and enterprises in these fields will also gain development opportunities.