How to view and respond to rises and falls in agricultural product prices
Regarding the prices of agricultural products, what needs attention first is not the rise or fall itself, but clarifying whether it is a normal rise or fall or an abnormal one. It is necessary to change the "firefighting" approach of treating the symptom rather than the root cause. On the one hand, it is necessary to improve the price formation mechanism for agricultural products, and improve the market regulation system and agricultural subsidy system for agricultural products; on the other hand, it is necessary to accelerate the building of a new type of agricultural operation system and encourage farmers to respond to changes in market supply and demand through market-oriented organizational structures.
These days are exactly the garlic harvest and market season, and news of "Suan Ni Hen" (garlic is brutally expensive) has spread once again. Similar to "Suan Ni Hen," in recent years "Jiang Ni Jun" (ginger is brutally expensive), "Xiang Qian Cong" (scallions are brutally expensive), and "Zhu Jian Ting" (pork stays firm) have hardly ever stopped. Every wave of news about sharp rises or falls in agricultural product prices attracts public attention. So, how exactly should we view and respond to the relatively frequent price rises and falls of fresh agricultural products such as scallions, garlic, and vegetables?
In fact, the prices of all agricultural products are always rising and falling. An agricultural product market without rises and falls does not exist, and this is the same in markets worldwide. Therefore, regarding the prices of agricultural products, what needs attention first is not the rise or fall itself, but clarifying whether it is a normal rise or fall or an abnormal one.
Regarding the prices of agricultural products, normal rises and falls mainly include several situations: rises and falls caused by changes in supply and demand. For example, if the price of mung beans was low the previous year, everyone will not plant them or will plant fewer this year, causing a reduction in mung bean supply and a price increase. Rises and falls caused by changes in costs. For example, if the prices of fertilizer, water, and freight rise, or labor costs rise, the prices of agricultural products rise along with them. Rises and falls caused by abnormal climate or various disasters. Agricultural production has a long cycle and is vulnerable to various extreme weather and disasters such as pests and diseases. Reduced production or even total crop failure can trigger price increases. Against the backdrop of economic globalization, changes in international market prices can also cause changes in domestic agricultural product prices. This is a normal manifestation of globalized trade and competition.
In addition, several other situations also belong to normal rises and falls: immediate or short-lived price rises and falls caused by local information asymmetry. China has a vast territory and dispersed planting. Asymmetric supply and demand information for a certain product in a local area, or unsmooth circulation, causes temporary rises and falls. For example, radishes in a certain village cannot be sold and rot in the fields. Short-term rises and falls caused by the season when new vegetables come onto the market. Agricultural products have natural attributes. In the first period each year when new vegetables come onto the market, prices relatively rise, and afterward they relatively fall. A certain degree of reasonable rises and falls brought by the entry of capital. At present, the proportion of various types of capital entering the agricultural product market is gradually increasing, changing the original patterns of circulation, storage, processing, sales, and branding, which is bound to bring price changes. As long as they remain within a reasonable range, they are legitimate market behavior.
As for abnormal rises and falls, there are mainly two types: one is market monopoly behavior. For example, several large producers or sellers, through price alliances or even malicious collusion, control the circulation and sales of a certain agricultural product, mainly small-volume products, causing prices to soar or plunge, greatly exceeding consumers' capacity to bear, and seriously deviating from the law of market value, or monopolizing a certain product for a long time, causing the price of that product to deviate from the supply-demand relationship for a long time. The other is administrative monopoly behavior. For example, in a certain place, in order to drive up local products, the market is artificially blocked, information is obstructed, circulation channels are controlled, or the circulation and sale of a certain agricultural product are hindered through extra high fees and other methods, seriously distorting prices and causing excessive rises and falls.
Once the basic types of price rises and falls are clarified, it becomes easier to change the "firefighting" approach of treating the symptom rather than the root cause, and "what to do" will be done with confidence and a clear target. For normal rises and falls, as long as there is no malicious speculation and no serious disruption of the market, one should believe that the market has this regulatory capacity and believe in the role of this market hand. What needs to be done is to release information in a timely and comprehensive manner and prevent small losses from becoming big ones because information is not timely or sufficient. What is noteworthy is that various media should improve their ability to distinguish information about price rises and falls, and prevent being misled by various "trial balloon" price messages or occasional or even artificially manufactured individual cases, which can cause follow-the-crowd speculation and amplify signals of rises and falls.
For abnormal rises and falls, China has the Price Law and the Anti-Monopoly Law, and financial institutions also supervise the inflow of huge amounts of funds into a certain field. Strict implementation of these laws and regulations, fulfilling one's duties, and making no compromises will produce results.
At present, to keep domestic agricultural product prices rising and falling within a reasonable range, the key is to give full play to the role of the government's hand. In the immediate term, the focus is on establishing and improving an information release system, using various monitoring platforms of government departments to release forecasts and early warnings on the supply and demand of agricultural products in a timely manner, and guiding farmers' willingness to plant and breed; increasing efforts to establish green channels and venues, reducing and canceling the numerous fees in circulation and sales links, and promoting cost reductions in all links of agricultural products. In the long term, on the one hand, it is necessary to improve the price formation mechanism for agricultural products, and improve the market regulation system and agricultural subsidy system for agricultural products; on the other hand, it is necessary to accelerate the building of a new type of agricultural operation system, develop and strengthen agricultural product industry associations and farmers' specialized cooperative organizations, and encourage farmers to respond to changes in market supply and demand through market-oriented organizational structures.