The agricultural product market needs a shock absorber

Currently, the degree of organization in China's agricultural production and operation is still relatively low. At the same time, the disclosure system for agricultural product price index information is not sound or complete, and the asymmetry of production and sales information is very prominent. The phenomenon of "cheap grain hurting farmers" occurs from time to time. On the one hand, prices fluctuate greatly, and farmers complain endlessly; on the other hand, prices soar and plunge, leaving consumers with many complaints.

As we all know, price is an "indicator" of changes in the supply-demand relationship of goods, and the agricultural product price index comprehensively reflects the price level of agricultural products and its changes. It can provide agricultural product producers, operators and consumers with price information on production, purchasing, processing, sales, consumption and other links, and is conducive to solving the problem of price information asymmetry in the agricultural product market. Scientifically compiling and timely releasing the agricultural product price index, and studying the trend, degree and laws of changes in agricultural product prices, are of great practical significance.

First, compiling and releasing the agricultural product price index, grasping the trend and laws of agricultural product price changes, studying the transmission mechanism of agricultural product prices, and then analyzing the laws of changes in agricultural product supply and demand, and studying the behavioral characteristics of agricultural product producers and consumers, can provide decision-making basis for governments at all levels to formulate policies on agricultural product production, circulation and consumption, rationally allocate and optimize agricultural resources, guide agricultural structural adjustment, and advance the process of agricultural modernization and agricultural informatization.

Second, compiling and releasing the agricultural product price index is conducive to giving play to the guiding role of agricultural product market prices and guiding the production and operation of agricultural products. True and accurate price information can effectively dissolve the negative impact of market expectations caused by information asymmetry. Agricultural producers can, based on price information, promptly adjust and optimize the agricultural production structure and product structure in line with market changes, grasp the best timing for selling and purchasing agricultural products, and thereby enable agricultural producers to control market risks, ensure increased agricultural production and efficiency, and increase farmers' income.

Finally, compiling and releasing the agricultural product price index and providing timely and accurate agricultural product price information are conducive to stabilizing market expectations for agricultural product prices, guiding consumers to consume reasonably and rationally, and maintaining the balance between supply and demand of agricultural products. As a comprehensive "indicator" of changes in agricultural product prices, the agricultural product price index can correctly guide social expectations, stabilize the market price of agricultural products, avoid excessive fluctuations in agricultural product prices, and ensure the smooth and orderly operation of the agricultural product market.

There is very broad space for the development and utilization of the agricultural product price index. First, the agricultural product price index can be used as the underlying target to develop and innovate agricultural product price index insurance business. In recent years, China's policy-based agricultural insurance has achieved rapid development, but there is basically no protection for another important risk in agricultural production and operation - market risk or price risk. As an innovative agricultural insurance product, agricultural product price index insurance is an institutional arrangement that provides economic compensation to agricultural production and operation operators for losses caused by large fluctuations in market prices, or agricultural product prices being lower than the target price or price index. Second, the agricultural product price index can be used as the underlying target to develop and innovate agricultural product price index futures business. Index futures refer to futures contracts that use an index as the underlying asset. They also have risk avoidance functions, price discovery functions and asset allocation functions. They can improve China's agricultural product market index system, strengthen the tracking, monitoring and forecasting of the overall trend of agricultural product price changes, and deepen the way the futures market serves "agriculture, rural areas and farmers."