The price formation mechanism for agricultural products should let the market play the main role
The prices of agricultural products not only concern agricultural products themselves, producers and consumers, but are also an issue that affects improving agricultural quality and efficiency, increasing farmers' output and income, and rural economic and social development, and are furthermore one of the elements for the normal development of the agricultural product market. However, in the current price formation mechanism for agricultural products, as labor costs and production costs rise and international agricultural product prices keep being pushed down and other reasons, the prices of major domestic agricultural products often exceed those of the international market. At the same time, there also exist reasons such as the “amber box” of agricultural subsidies, which have also intensified the fluctuations in agricultural product prices, dampened farmers' enthusiasm for production, and caused problems such as low competitiveness of agriculture in market participation. How to reduce the large rises and falls in agricultural product prices and form a set of prevention and control mechanisms to deal with risks - the representatives and members of the Two Sessions offered good prescriptions.
Build information circulation channels and monitoring systems linking the market, producers and consumers, and adhere to the principle of market pricing
“The price of agricultural products is linked to farmers at one end and to consumers at the other. Now the price formation of agricultural products, especially the price formation of important agricultural products, is no longer determined by the market, but by some non-market factors.” Member Lai Mingyong, member of the Standing Committee of the Central Committee of the China Democratic National Construction Association and president of Changsha University of Science and Technology, believes that the anomalies shown by current fluctuations in agricultural product prices are mainly affected by multiple influences at four levels: supply, demand, market and government, but the fundamental problem is the asymmetry of agricultural product market information, which causes agricultural product prices to deviate from the fundamentals of price. The state does not issue authoritative market warnings before agricultural products are planted and raised, so producers naturally rely on feelings and experience to plant and raise blindly. Lai Mingyong said: “It is suggested that the state establish a networked platform for monitoring agricultural product transaction information and an early warning system, to solve the situations in which farmers' planting and raising are not connected with the market, production is not connected with supply, and information is not symmetrical with the market, so that farmers have expectations and judgments about the market before planting and raising.”
“Price is formed in circulation; it is not something anyone can set just because they want to.” Representative Li Shiqiang, vice president of the China National Urban Agricultural Trade Center Federation, believes that only smooth information can lead out of the “strange cycle of rises and falls” in agricultural products, and that “what the government should do is take a long-term view, follow the laws of the market economy, and give as much play as possible to the signaling role of the integration, research and release of agricultural product price information, guide price stability, and help scientific decision-making, rather than intervening in agricultural product prices.”
“The formation of target prices is determined by the supply and demand relationship in the market, and plays an important role in improving the price formation mechanism for agricultural products.” Member Chen Xiwen, director of the Office of the Central Leading Group on Rural Work, said that letting the market play the main role in price formation in this way conveys correct market demand information to farmers, lets farmers carry out production according to market demand, and gradually resolves the contradictions formed over these years.
Cultivate branded products and advantageous agricultural products, carry out standardized, intensive and large-scale production and operation, and enhance competitiveness
Chen Zhangliang, member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference and vice chairman of the China Association for Science and Technology, believes that improving the price formation mechanism for agricultural products also requires efforts from within, and suggests using science and technology to develop modern agriculture, cultivate branded products and advantageous agricultural products, carry out standardized, intensive and large-scale production and operation, reduce the production costs of agricultural products, improve the ability of agricultural products to withstand natural disasters, stabilize the agricultural product market and price fluctuations, and reduce the income risks of farmers.
A good brand is a guarantee of quality, and quality is related to the trend of agricultural product prices. “Why are imported agricultural products expensive yet people are still willing to buy them? Because everyone believes their quality is guaranteed.” Member Zhang Quanguo, vice president of Henan Agricultural University, suggests strengthening supervision over the quality of agricultural products, especially branded agricultural products: “When quality is good, market circulation is fast, and the price trend is naturally smooth, thereby playing a role in stabilizing the price fluctuations of other related agricultural products.”
Member Zhu Baocheng, president of the China Association for the Development and Service of Quality Agricultural Products, suggests including products with high technological content, large market capacity, high added value and low energy consumption in strategic planning, establishing and improving the industrial chain, value chain and supply chain of brand agriculture, enhancing the influence of brand agriculture, guiding it to become bigger and stronger, participating in international agricultural product market competition, striving for the “right to speak” in agricultural product market prices, helping agricultural products go abroad, and thereby promoting the improvement of China's price formation mechanism for agricultural products.