The price reform of agricultural products needs the proper cooperation of "two hands"

Not long ago, some opinions of the CPC Central Committee and the State Council on promoting the reform of the price mechanism were issued. The opinion points out that as the core of the market mechanism, the price mechanism plays a decisive and key role in the allocation of resources. The continuous promotion and deepening of price reform has played an important role in establishing and improving the socialist market economic system and promoting sustained and healthy economic and social development. The signal sent by the "opinion" is very clear, fully demonstrating the determination and strength of letting the "invisible hand" decide to allocate resources. This is in line with the requirements and spirit of the third Plenary session of the 18th CPC Central Committee: "Let the market play a decisive role in the allocation of resources and give better play to the role of the government."

The "opinions" also clearly put forward the need to improve the price formation mechanism of agricultural products, pay attention to the role of the market in forming prices, implement differential support policies for different varieties, and gradually expand the scale and scope of the "green box" support policy. We will continue to implement and improve the policy on minimum purchase prices for rice and wheat, reform and improve the corn procurement and storage system, continue to carry out pilot reforms in the target prices of cotton and soybeans, and improve subsidies.

Reviewing the history of the price reform of agricultural products in China, the idea of implementing the price reform of agricultural products is consistent, that is, to return the pricing power of agricultural products to the market. China liberalized the purchase and sale prices of most agricultural and sideline products as early as 1985, live pigs and pork prices in 1992, cotton purchase prices in 1999, and grain purchase markets and prices in 2004. Since the 18th CPC National Congress, especially since the third and fourth Plenary sessions of the 18th CPC Central Committee, many substantive reforms have been made in reforming the pricing of agricultural products, until this "opinion" was issued. It can be seen that after a long-term positive exploration, the price determined by the market has become the direction of the reform, which is determined by the production characteristics and circulation law of agricultural products. As we all know, agricultural products, especially grain, have large demand elasticity, long industrial chain and high correlation between domestic and foreign markets. guiding production and adjusting supply and demand through market price signals can effectively optimize the allocation of resources and reduce the loss of social welfare.

Different from other product price reform, the implementation of agricultural product price reform must take into account food security, agricultural production efficiency and farmers' income. In view of the large price difference between domestic and foreign grain prices in the field of agricultural production and circulation, a series of contradictions such as price distortions in the upper and lower reaches of the industrial chain, the introduction of this "opinion" is timely, which can not only effectively solve the current outstanding problems. Moreover, it will play an important role in improving the trade environment of agricultural products at home and abroad, reducing the pressure of government financial expenditure and improving the price formation mechanism of the industrial chain. at the same time, the positive externalities brought about by price reform will attract more positive factors into the agricultural field, which is undoubtedly a great benefit to agricultural production and the circulation of agricultural products. Moreover, with the gradual promotion of the target price management system in the field of crops and the trend of continuous increase in the import volume of most agricultural products, the correlation between the prices of agricultural products and the international market will increase, which will help to smooth the cyclical fluctuations caused by supply and demand factors, thus reducing the sharp rise and fall of spot prices in the short term, and will play an important role in stabilizing the increase of farmers' income.

How to promote the price reform of agricultural products? First of all, we must make full use of the invisible hand. From the performance of the price fluctuation of agricultural products in the past, the fluctuation forms are mainly divided into four types: trend, periodicity, seasonality and contingency. Although the performance of each type of fluctuation is different, fundamentally speaking, the price of agricultural products is determined by the relationship between supply and demand, and the relatively stable demand for agricultural products makes supply often become the primary factor in the study of agricultural prices. There are not only natural factors that affect the supply of agricultural products, such as planting scale, weather and epidemic situation, but also changes in domestic and foreign market factors have an important impact on the supply level. the impact is often through four paths: demand stimulation, cost promotion, investment and international pricing, which includes both technical investment transaction operation and macroeconomic adjustment at policy level. There are also changes in the relationship between supply and demand at the basic level, the influence is complex, and it is often difficult to grasp comprehensively, but the market has inherent stability and trading rules, which can effectively reflect the value of agricultural products through prices. it is undoubtedly the best choice to regulate the circulation of agricultural products through the "invisible hand" of the market.

Secondly, the "visible hand" should not be ignored to promote the price reform of agricultural products. In order to strengthen the accuracy of government regulation, we must give better play to the role of the government. The government can directly or indirectly affect the price of agricultural products through the collection and storage policy and the setting of target prices. At the same time, we should increase the intensity of financial support for agriculture, optimize the structure of financial support for agriculture, improve the incentive effect of financial support for agriculture, and improve the relevant preferential policies for the production and circulation of agricultural products to guide production. In addition, the government should also strengthen the construction of the market environment, plan and distribute the existing agricultural products production and circulation market, develop modern warehousing and logistics facilities, improve the information level of rural agricultural products, and build an electronic platform suitable for the production and circulation of modern agricultural products.

In short, the smooth implementation of the agricultural product price reform should not only avoid the improper intervention of the "visible hand", but also help to correct the "market failure". Only when the "two hands" cooperate properly can we truly realize what is said in the "opinion": "whatever can be formed by the market will be handed over to the market" and improve the system and ability of the state to govern prices. build a scientific, standardized, and transparent modern price supervision system, so as to establish a price system of agricultural products in line with the characteristics of the socialist market economy.