The phenomenon of "hanging upside down" in the grain market highlights the need for unification in the price reform of agricultural products.

The phenomenon of "hanging upside down" in China's grain market is prominent, and the price subsidy of agricultural products is close to the upper limit of the WTO "yellow box" subsidy rules, so it is more and more difficult to sustain the purchase. To adjust grain purchase prices, we can not simply reduce financial subsidies, directly require the prices of domestic agricultural products to be in line with international standards, nor can we deviate from reality to reduce the planting of small-scale farmers and unilaterally pursue economies of scale. It must be considered as a whole and policies must be carried out safely. It is necessary to explore supportive and protective policies that are less distorting to the market, more accurate in orientation, operational and in line with WTO rules, and at the same time support the goal of protecting agriculture.

This year, the state has lowered the temporary purchase and storage price of corn by 0.13 yuan per catty, and the minimum purchase price of wheat and rice remains unchanged. This adjustment is not only in line with the current agricultural and grain conditions, but also shows the market that the means of state price subsidies will more respect the laws of the market, and the support and protection for farmers will continue to be more scientific and reasonable.

Reform is necessary and subsidies are necessary. The temporary storage price of corn has been reduced by about 10%, which does have an impact on farmers' income, especially for grain farmers in the main producing areas. Compared with small-scale farmers, each household planting 3 to 5 mu, the decline of corn income is limited. For large-scale growers, the income from direct grain sales will be significantly reduced. However, due to the national policy new projects, subsidies and so on began to tilt to large-scale growers, while large-scale growers have certain advantages in grain quality, processing and sales, which to a certain extent reduced the impact of price reduction on total income.

At present, the grain market presents a complex situation of upside down prices at home and abroad, prices in main producing areas and main selling areas, and prices between raw grain and finished grain, so it is inevitable to adjust grain purchase prices. From the perspective of international competition, the price of supporting the market faces the "ceiling". Since 2004, the state has implemented the minimum purchase price policy for rice and wheat, and the temporary storage policy for corn, soybeans and cotton since 2007. Since 2008, the price of supporting the market has risen year after year. Since 2011, international food prices have continued to decline, resulting in a widening price gap between domestic and foreign agricultural products and increasing import pressure. Last year, the domestic prices of China's grain, cotton, oil, sugar and other agricultural products were higher than the after-tax prices of imports within the quota of foreign products. According to the "yellow box" subsidy rule of WTO, the subsidy that directly affects the price of agricultural products in our country should not exceed 8.5%. At present, it is close to this limit.

From the perspective of the domestic grain industry, market-supporting acquisitions are becoming more and more difficult to sustain. The price of supporting the market has increased year by year, so that the expectation of "only rising but not falling" in grain prices has been enhanced, and the characteristics of the market "policy market" have been strengthened. In particular, corn, cotton and sugar have formed a strange circle of "domestic production increase, national reserve increase, import increase and national reserve increase". In the purchase of grain and cotton, the government assumed the main responsibility for the purchase of grain and cotton, resulting in the situation of "domestic goods entering the warehouse and foreign goods entering the market", with a heavy financial burden, while downstream processing enterprises and consumers paid higher costs.

In the face of this phenomenon, we can not simply reduce financial subsidies and directly require the prices of domestic agricultural products to be in line with international standards, nor can we deviate from reality to reduce the planting of small-scale farmers and unilaterally pursue economies of scale. It must be considered as a whole and a sound policy must be implemented. Agricultural policy is not a simple industrial policy, but also related to rural development and social stability. The price formation mechanism of agricultural products directly determines the interests of farmers and the stable supply of agricultural products. We should not only ensure food security and market stability, but also consider the competitive relationship in the international market, as well as the livelihood and well-off of hundreds of millions of farmers.

Therefore, the adjustment of agricultural product prices and agricultural subsidy policies must be coordinated as a whole. The price of agricultural products should be mainly determined by the market, so that the market plays a decisive role in the allocation of resources. At the same time, we should continue to adhere to the support policies for agricultural farmers, but the support policies should also be constantly improved. It is necessary to explore support and protection policies with less distorting effect on the market, more accurate orientation, strong maneuverability, and in line with WTO rules, and at the same time, supporting and protecting agriculture is not only for increasing production, but also for benefit and quality.

At present, the idea of agricultural product price reform has been clear, and the current target price reform of cotton and soybean is the embodiment of this train of thought. This reform, taking into account production costs, farmers' profits, domestic and foreign price differences and other factors, separated subsidies from prices, and greatly reduced the intervention in prices. Of course, the reform of grain purchase price adjustment is complicated, and it must be carried out actively and steadily on the premise of ensuring food security and ensuring farmers' enthusiasm for growing grain and their income. With the growth of new agricultural operators and the acceleration of moderate scale operation, China's agricultural competitiveness will continue to enhance, and the support for the price reform of grain and other major agricultural products will become stronger and stronger.