What would happen if the rice protective price rose from 1.3 yuan per jin to 2.6 yuan?
Summary: If China's minimum purchase price for rice rose from the current 1.3 to 2.6 yuan per jin, what would be the result?
If the rice protective price rose from 1.3 yuan per jin to 2.6 yuan per jin, what would be the result? Science Promoting Agriculture believes that if the above hypothesis held true, I would not be far from making a fortune; this is an obvious business opportunity! Why say so? Then read on, and let us take a look together. Everyone should also be prepared, so that if that day really comes, you can seize this business opportunity.
From the current international market situation, Thailand's rice export quotation is 400 US dollars per ton, roughly equivalent to about 1.2 yuan per jin. Of course, rice prices in Pakistan and Japan are basically the same. If we speak only of paddy rice, the price is even lower. Here we will not split hairs over paddy rice versus milled rice, and will uniformly use 1.2 yuan per jin.
Just imagine, if China's minimum protective price for rice were 2.6 yuan per jin, would you see a business opportunity? The price gap between imported rice and domestic rice would be 1.4 yuan per jin, and such a price gap would be enough for us to make a fortune. Once such an opportunity appeared, all we would need to do is import rice in large quantities, then resell it to the state grain depots. From this, we would earn the price difference of 1.4 yuan per jin. Marx once said that a 100 percent profit is enough to make merchants take risks, and this business's profit exceeds 100 percent while also having no risk, so why not do it?
From the above analysis, we can see that if the above hypothesis really came true, then China's grain market would immediately be thrown into disorder. What would the result be? Grain processing enterprises would import international rice on a large scale, while the grain in our farmers' hands would instead have no way to be sold! Why? Because domestic grain prices would be too high. As long as one is not foolish or idiotic and one's head is still fairly normal, it would be impossible to buy grain from farmers.
For those farmers who rely on farmland cultivation, things would probably be rather grim. For the grain depots, the priority purchases would probably also go to those large-volume big customers, while for small farmers with only a few thousand jin each, such high grain prices would probably make it hard for their grain to get a turn at being purchased. And once the grain depots had finished purchasing, could the market's high grain prices still be maintained? To maintain them, the grain depots could only continue purchasing. However, given China's financial capacity, do you think it could buy up the world's grain for hoarding?
Obviously, the above hypothesis has no feasibility whatsoever. Many people pin their hopes on high grain prices. After reading the above analysis, do you still think China's high grain price strategy can succeed? Farmers' interests certainly need to be protected, but the way to protect farmers' interests is not to adopt high grain prices. And if high grain prices really did arrive, then I think the time for everyone to seize the business opportunity would also have come.