How can vegetable prices be regulated in a scientific and reasonable way?

China is a major country in vegetable production and consumption, and vegetables occupy an important position in China's agriculture. However, in recent years, the phenomenon of sharp rises and falls in vegetable prices has been prominent. Abnormal fluctuations in vegetable prices have brought adverse effects on the healthy development of the national economy, and have also attracted great attention from the Party and the government. In recent years, the central government and various ministries and commissions have formulated and implemented many regulatory policies to ensure vegetable supply and stabilize vegetable prices, and the focus of these regulatory policies is very clear: ensure supply, promote circulation, and stabilize prices. Against this background, in order to regulate vegetable prices in a scientific and reasonable way, it is necessary to discuss the problems existing in China's vegetable prices and their causes, and put forward targeted policy recommendations.

Problems existing in China's vegetable prices

In the past 30 years, China's vegetable industry has achieved considerable development. The total vegetable area grew from 3331×103 hectares in 1978 to 20899×103 hectares in 2013, an increase of about 527.4%, with an average annual growth rate of 7.3%. Vegetables are the second largest crop in China after grain crops, and the proportion of vegetable sown area in China's total crop sown area has shown an upward trend. Vegetable production has gradually concentrated in advantageous regions, the vegetable circulation system has gradually improved, and the pattern of a large vegetable market and large-scale circulation has initially taken shape. Vegetable exports have grown rapidly.

The main problems existing in China's vegetable prices are:

(1) Vegetable prices fluctuate frequently and violently. Frequent and violent fluctuations in vegetable prices will lead to a series of negative effects: first, they increase the market risk for vegetable producers. Second, they harm consumers' interests. Third, they endanger macroeconomic stability. Rising vegetable prices have become one of the main factors pushing up domestic inflation. Therefore, sharp rises and falls in vegetable prices will bring negative effects on macroeconomic stability.

(2) Vegetable producers find it difficult to profit from price increases. From 1998 to 2013, the profit of vegetable producers varied between 0.38 yuan/kg and 0.74 yuan/kg, with an average profit of about 0.5 yuan/kg. From 1998 to 2013, the vegetable production price increased by 126%, vegetable costs increased by 153%, while the net profit from vegetable production increased by only 97%. It can be seen that China's vegetable production price and vegetable production costs rose in sync, but the profit of China's vegetable producers did not rise along with the increase in vegetable production prices. The phenomenon of finding it difficult to profit from rising vegetable prices will affect vegetable producers' efforts to increase income and become prosperous, will reduce vegetable producers' enthusiasm for growing vegetables, and is not conducive to the development of the vegetable industry.

(3) The price gap between vegetable production and sales has widened, giving rise to the phenomenon of "jumping at both ends, laughing in the middle." The widening price gap between vegetable production and sales reflects, on the one hand, that vegetable producers have difficulty selling vegetables, and on the other hand, that vegetable consumers buy vegetables at high prices. The widening price gap between vegetable production and sales has dampened the enthusiasm of vegetable growers and also increased the living costs of urban residents, becoming a social issue of widespread concern.

Analysis of the causes of the problems

(1) The main reasons for the sharp rises and falls in vegetable prices. 1. Abnormal weather intensifies vegetable price fluctuations. 2. The reduction of vegetable plots in suburban areas increases the uncertainty of vegetable price fluctuations. 3. Information asymmetry intensifies the temporal and spatial imbalance between vegetable supply and demand. Information asymmetry has at least the following harms: first, it leads to "blind planting" and "follow-the-crowd planting." Second, it leads to the same vegetable being "priced like heaven in one region and dirt in another." Insufficient information among vegetable industry practitioners prevents the contradiction between vegetable supply and demand in different regions from being reconciled in a timely manner.

(2) The reasons why vegetable producers find it difficult to share the benefits of price increases. 1. Rising vegetable production costs squeeze the profit margins of vegetable producers. 2. Vegetable producers have no pricing power in the vegetable trading process. Compared with vegetable dealers who have broad information channels and strong market power, vegetable producers are more dispersed and isolated. Individual vegetable producers have shortcomings such as information asymmetry, weak strength, and low standardization, which lead to weak bargaining ability and lack of pricing power for vegetable producers in the vegetable purchasing market. 3. Overcapacity in vegetable production harms the interests of vegetable producers.

(3) The reasons for the widening price gap between vegetable production and sales. 1. The separation of vegetable production and sales and cross-regional circulation of vegetables lead to higher circulation costs. China's vegetable production has gradually concentrated in advantageous regions, which on the one hand alleviates the contradiction between vegetable supply and demand in the off-season, and on the other hand leads to the separation of vegetable production and sales and cross-regional circulation of vegetables. The separation of vegetable production and sales objectively increases the transportation distance of vegetables, leading to higher circulation costs, which in turn boosts vegetable prices. 2. Under the traditional circulation model, there are too many intermediate circulation links, leading to higher circulation costs.

Countermeasures and suggestions

(1) Give play to government functions and stabilize vegetable prices. 1. Strengthen infrastructure construction in major vegetable-producing areas and improve the disaster resistance and disaster reduction capacity of vegetable production. Strengthen the construction of vegetable plot infrastructure, with emphasis on water conservancy facilities, greenhouses, and plastic tunnels. Strengthen the construction of hardened field main roads and branch roads, and equip them with production electricity facilities. Strengthen the construction of water sources and supporting channel projects, and improve irrigation and drainage capacity. Gradually build high-yield and stable-yield vegetable production bases that can drain and irrigate, have fertile soil, are convenient for transportation, and have strong disaster resistance, and effectively improve the comprehensive vegetable production capacity. 2. Increase protection of suburban vegetable bases and vigorously develop protected vegetable cultivation. Suburban vegetable bases are the "ballast stone" for stabilizing urban vegetable prices. High-standard vegetable bases should be established according to the principles of scientific planning and step-by-step implementation. In addition, protected vegetable cultivation should be vigorously developed. 3. Establish a vegetable market price information platform and strengthen monitoring and early warning of vegetable prices. Establish a public service platform for vegetable production and sales information covering all regions of the country, standardize information collection standards, improve information exchange and release mechanisms, strengthen the construction of related infrastructure such as collection points, information channels, and network centers, and regularly collect and release information on vegetable production, supply and demand, quality, and prices. Let information guide vegetable growers, reduce phenomena such as "blind planting" and "follow-the-crowd planting," and promote a balance between vegetable market supply and demand. Strengthen the monitoring and early warning of vegetable prices, obtain vegetable monitoring data in a timely and accurate manner, carefully analyze vegetable market dynamics, accurately grasp the vegetable market price situation, guide vegetable growers to plant rationally, and also provide reference for the government to carry out macro-control and stabilize market prices.

(2) Reduce vegetable production costs and improve the profitability of vegetable growers. 1. Use the power of science and technology to reduce vegetable production costs. First, increase investment in vegetable scientific research. Accelerate research on energy-saving, efficient, and practical cultivation techniques and the breeding of new vegetable varieties that are tolerant to weak light, tolerant to low temperatures, highly resistant to stress, high-yielding, and high-quality. Actively carry out research on related technologies such as protected vegetable cultivation, storage and preservation, and processing. Second, cultivate new-type farmers. Strengthen practical technical training, improve vegetable farmers' scientific and technological quality and the rate of technology reaching the fields. Third, improve the level of technical equipment in the vegetable industry. Vigorously develop and promote mechanized vegetable sowing, cultivation, and harvesting equipment, mechanized operation equipment for greenhouses and plastic tunnels, pre-production seed processing and coating, intensive factory production of seedlings, mechanized seedling grafting equipment, post-harvest commercialized assembly-line processing equipment for vegetable products, cold storage and transportation facilities, and deep processing equipment, and focus on improving the technical equipment conditions of the vegetable industry. 2. Improve the pricing power of vegetable producers in the vegetable trading process. First, improve the scale and degree of organization of vegetable growers. Establish collective operating organizations such as vegetable professional cooperatives, bring vegetable producers together, improve the degree of scale and organization, and let collective organizations such as vegetable professional cooperatives negotiate on behalf of farmers. Second, improve the overall quality of vegetable growers. For example, improve vegetable storage capacity and direct sales and distribution capacity, and improve vegetable growers' information acquisition ability and brand creation ability. 3. Regulate the scale of vegetable production and the structure of the vegetable industry. Regulate the structure of the vegetable industry according to residents' dietary structure and nutritional needs, develop high-quality vegetable varieties, develop deep processing of vegetables, increase the added value of vegetable products, and promote the vegetable industry's shift from quantity growth to quality growth. In addition, actively opening up overseas markets is also an important way to reduce the negative effects caused by overcapacity in vegetable production.

(3) Reduce vegetable circulation costs and narrow the price gap between production and sales. 1. Attach importance to localized production of vegetables in sales areas. The separation of vegetable production and sales and cross-regional circulation are important reasons for the widening price gap between vegetable production and sales. In the future, the scale of vegetable production in sales areas should be appropriately increased, the self-sufficiency capacity of vegetables in sales areas should be stabilized, and the pressure of continuous rises in vegetable prices should be alleviated. Build vegetable production bases in the suburbs of large cities, where fresh vegetables such as leafy vegetables with short growth cycles and short shelf lives can be grown. In cities with insufficient agricultural land resources, efforts can be made to build production bases in neighboring areas. Vegetable cooperation bases in surrounding provinces and cities can be included in the assessment indicators of the "mayor responsibility system for the vegetable basket." 2. Innovate circulation models, promote production-sales linkage, and reduce intermediate links. Actively implement various forms of production-sales linkage such as "farmer-supermarket direct purchase," "farmer-wholesale and retail direct purchase," and "farmer-wholesale, wholesale and retail direct purchase," encourage circulation enterprises such as wholesale markets and large chain supermarkets, and end users such as schools, hotels, and large enterprises to establish long-term and stable production-sales relationships with agricultural production bases, farmers' professional cooperatives, and leading enterprises in agricultural industrialization in major vegetable-producing areas, reduce intermediate links in vegetable circulation, and lower circulation costs.