Mainland Agricultural Product Prices Caught in a Recurring Cycle of Rises and Falls; Supply-Demand Imbalance Hurts All Parties
Mao Yugui, a 60-year-old vegetable farmer in Lanzhou, lost money on all four mu of cauliflower he planted this year. The price slump in cauliflower, which has been on the market for nearly a month, has left the old man “wounded”: since mid-July, cauliflower prices began falling from 1 yuan per jin (RMB, same below), down to 1 jiao, 5 fen…… until no one would even ask about it, and in the end it could only be dumped or fed to livestock.
Right now, Gansu's “plateau summer vegetables” are in their harvest season, supplying more than 80 large and medium-sized cities across the mainland. In the vast mountains of Yuzhong County, Lanzhou, withered and rotting cauliflower and leaves can be seen everywhere left in the fields. Some vegetable farmers gather these up in time and dump them elsewhere to free up the land for planting other vegetables. Others simply call over nearby flocks of sheep to help “clean up.”
“Last year, when cauliflower prices were at their best, they reached three or four yuan per jin, and one mu of land could yield an average of six thousand jin!” In Mao Yugui's view, many vegetable farmers got a taste of the “good prices” for cauliflower last year, which led to a sharp expansion of cauliflower planting area here this year, but the buyers coming to the area simply could not “absorb” so much.
In order to grab a slot for delivering vegetables, Mao Yugui and his family have recently had to rush to the fields at three in the morning every day to cut cauliflower, then hurry it to a vegetable trading point several kilometers away. “If you go late, the buyers' trucks are already full.” Mao Yugui said that through this “rescue,” the cauliflower in the fields was basically sold, but the income was only about one thousand yuan per mu, which is not even enough to cover the inputs for seeds, pesticides, fertilizer and labor.
“In more than ten years of growing cauliflower, I've only run into this once; it's never been this bad.” After selling off some of the better-quality cauliflower at low prices, 62-year-old vegetable farmer Li Xialong could only watch helplessly as flocks of sheep came to gnaw on what was left in the fields. Although he is currently replanting “baby cabbage” in the fields these past two days, facing erratic market demand he is not very confident, “We just want to switch to planting other vegetables to make up for (the losses); whether they can enter the market later is still unclear.”
In recent years, because market supply and demand information has not flowed smoothly, prices of agricultural products on the mainland, including vegetables, have frequently fallen into a severe cycle of sharp rises and falls. From “Garlic You Ruthless” to “Garlic You Cheap,” from “Ginger You Army” to “Ginger Bureau,” wildly fluctuating agricultural product prices not only make farmers on one end uneasy, but consumers on the other end express their dissatisfaction and helplessness through mockery. In addition, wholesalers stuck in the middle are also complaining endlessly.
Lanzhou vegetable trader Luo Lianfu has long been in the business of reselling Gansu summer vegetables to Beijing, Xi'an and other places. “Not only in Gansu; farmers in Shandong, Hebei and other places have also been planting cauliflower blindly this year.” With 18 years of experience in market supply and demand, he said this has led to generally low prices across regions, with some even unsalable. “At this point, selling cauliflower elsewhere usually means losing money, but if you stop, you'll lose your position in the out-of-town vegetable market, so even if you lose money you have to grit your teeth and keep going.”
“Poor supply and demand information and planting ‘collisions’ across regions are the main reasons for this plunge in cauliflower prices,” said Kou Mingke, director of the Gansu Provincial Agricultural Product Marketing Management Office, in an analysis to a China News Service reporter on the 13th. He said that vegetable planting returns have been relatively good these past two years, and many farmers on the mainland have “followed the trend” in planting, especially vegetable varieties with relatively strong short-term market demand. Vegetable farmers' information often lags behind market changes, thus causing vegetable prices to plunge or surge.
According to official statistics, as a production, supply and wholesale distribution center for vegetables in the northwest, Gansu supplies more than ten varieties and about 4.5 million tons of vegetables to more than 20 provincial capital cities in the south from May to October each year. In addition, it also exports to South Korea, Japan, Southeast Asian countries and the Hong Kong, China, Macao, China and Taiwan, China regions.
Kou Mingke said that in order to avoid the “collision” risk brought to farmers by poor supply and demand information, Gansu has stepped up the construction of vegetable cold storage in recent years to regulate market supply and demand, while also relying on market information from various regions fed back by more than 300 vegetable buyers who come from outside each year. “Judging from the situation in recent years, farmers' planting risks have already been significantly reduced.”