The target price system of agricultural products cannot replace the temporary storage system.

This year's No.1 Document of the Central Committee of the Communist Party of China proposes to gradually establish a target price system for agricultural products, which is of great significance. To establish the target price system of agricultural products, it is necessary to reform the minimum purchase price system of grain and the temporary storage system of important agricultural products, but it does not mean that the minimum purchase price system of grain and the temporary storage system of important agricultural products will be completely abolished in the future. We should raise awareness, correctly handle the relationship between the implementation of the target price system for agricultural products and the implementation of the minimum purchase price system for grain and the temporary storage system for important agricultural products, and rationally introduce the target price system for agricultural products.

Target Price System of Agricultural Products Cannot Completely Replace Minimum Purchase Price System of Grain

At present, China implements the minimum purchase price system for rice and wheat, which has dual functions of "price regulation" and "bottom purchase" in practice. As a reform scheme, if the target price system of agricultural products is established, it can replace the function of "regulating prices" contained in it, make the market mechanism play a better role, and at the same time transform the policy subsidies from implicit and difficult to control to explicit and controllable, improve the rationality and effectiveness of the use of government subsidies funds, but it cannot replace the function of "bottom purchase and sale" contained in it.

The minimum purchase price system of grain has a strong function of "regulating price", mainly adjusting price level, controlling price fluctuation range and ensuring farmers to obtain basic operating income. When purchasing grain, China Grain Storage Company mainly purchases grain at the lowest purchase price, while processing enterprises and other socialized purchase and sales enterprises will determine their respective purchase prices according to the lowest purchase price of grain in that year. Before the implementation plan of grain purchase price is started, they will purchase at the top, and after the implementation of grain purchase price implementation plan, they will purchase at the bottom. For processing enterprises and other socialized purchasing and selling enterprises, grain purchase takes up a large amount of funds, and the purchase and sale risks are relatively large. Unless grain production is reduced or there is a shortage of supply, the grain purchase price can be reduced as much as possible. Even in the year when the minimum purchase price plan for grain has not been officially launched, the minimum purchase price objectively plays the role of "regulating prices" and is the basis for market pricing. The continuous increase of the minimum purchase price is beneficial to protecting farmers 'interests.

The minimum grain purchase price system also has a strong function of "underpinning purchase and sale", mainly providing a channel for contract collection, ensuring that the grain produced by farmers in the main producing areas can be sold smoothly in time, adjusting surplus and shortage across regions and years nationwide, and realizing the logistics turnover of grain after delivery. China's rural areas have more people and less land. The main grain producing areas are mainly located in economically underdeveloped areas. Generally speaking, the storage and logistics conditions are relatively poor. Grain processing enterprises are underdeveloped. Grain production is affected by many factors such as weather and market. There are abundant and poor. When grain production is bumper, it is easy for local enterprises to be unwilling to purchase or even compete to lower prices, resulting in "difficulty in selling grain". For farmers, it is most important to be able to sell grain smoothly and earn income in time after it is produced. After the implementation of the minimum grain purchase price system, through the intervention of the China Grain Storage Company, fixed-point purchases were carried out mainly according to the limited minimum purchase price during the grain purchase season, and then storage adjustment and market auction were carried out across regions and years nationwide, helping farmers solve the problems of insufficient storage logistics facilities of local enterprises, reluctance of local processing enterprises and other social purchase and sales enterprises to purchase and even competition for lower grades and prices after the grain harvest. It is the substantial protection and reliability protection of the interests of farmers in the main producing areas by the state, and also enables the state to master the grain source with lower cost, which is used for cross-regional adjustment and inter-annual adjustment of surplus and shortage nationwide. It is the material basis and important means for the government to prevent inflation, protect people's livelihood and enhance international economic competitiveness.

The hidden defects of the minimum purchase price system of grain are that it is difficult to set the minimum purchase price reasonably, it is easy to rise but difficult to fall, it is necessary to organize to sell in the market in time after purchasing at the minimum purchase price, under the condition that the policy design is not careful and the domestic price is continuously higher than the international price by a large margin, it may distort the market, and it may bring huge financial risks, as well as rent-seeking and corruption. However, this system is relatively simple in operation, which can be completed mainly through the enterprise operation of China Grain Storage Company. It has high efficiency, reliable control and strong protection for farmers 'basic operating income. In contrast, the main function of the target price system for agricultural products is to provide policy subsidies or market loss subsidies. This kind of subsidies has an explicit and controllable nature, which can reduce market distortions and better play the role of the market in resource allocation. However, since China's agriculture is dominated by small production, the government's handling work will be more complicated, requiring the establishment of a special management system, requiring specific producers and specific consumers to make special registration declarations and accept examination according to unified regulations. The corresponding transaction costs and fiscal expenditures will increase significantly.

The target price system for agricultural products cannot completely replace the temporary storage system for important agricultural products

At present, China has implemented a temporary storage system for corn, soybeans, rapeseed, cotton, sugar and other important agricultural products. This system is similar to the minimum purchase price system of grain, and also has the dual functions of "regulating the price" and "underpinning the purchase and sale" of agricultural products produced by farmers. As a reform plan, if we establish the target price system of agricultural products, it can replace the function of "price regulation" contained in it, but it cannot replace the function of "bottom purchase" contained in it.

The main defects of the temporary collection and storage system of important agricultural products are that it is difficult to price the temporary collection and storage price reasonably, it is easy to rise and difficult to fall, it is necessary to organize to sell it in the market in time after temporary collection and storage, if there is reasonable loss, it shall be borne by the finance department, if the temporary collection and storage price is determined unreasonable, it may distort the market operation, disturb the reasonable price comparison and price difference relationship between different agricultural products, and may bring huge financial risks. However, it is relatively simple in policy operation, mainly completed by state-owned circulation reserve enterprises and some processing enterprises vertically managed by the central government, with high efficiency and strong protection for farmers 'basic operating income. In contrast, the main function of the target price system of agricultural products is to provide policy subsidies. Under the condition of reasonable system design, the decisive role of the market in resource allocation can be better exerted. However, the government subsidy work is very complicated and has important conditions, which may not decrease but increase in fiscal expenditure.

Main Problems Faced by the Minimum Grain Purchase Price System and the Temporary Storage System of Important Agricultural Products in Practice

China began to establish a minimum grain purchase price system in 2004 and a temporary storage system for important agricultural products in 2008. 2005-2006 In 2009, 2009 and 2012, the state launched the implementation plan for the minimum purchase price of indica rice, in 2007 and 2012 launched the plan for japonica rice, and in 2006 - 2009, 2012 and 2013 launched the plan for wheat. In 2008, 2012 and 2013, the state launched temporary corn storage, soybean and rapeseed storage from 2008 to 2013, and cotton and sugar storage from 2011 to 2013. After implementing these two systems, they have played an important role in increasing farmers 'income, promoting production development, ensuring market supply and stabilizing price levels. However, in practice, due to the changes in domestic and foreign markets, the next implementation of these two systems faces challenges.

In these two systems, the implicit assumption to ensure the reasonable operation of the system is that the domestic price is lower than or equal to the import cost price in the international market, and the domestic price itself must be determined reasonably, otherwise it may be impacted by the international market. A few years ago, due to the sharp fluctuations in international agricultural product prices, China's agricultural product prices were significantly lower than those in the international market. The state's "price regulation" mainly considered protecting the basic operating income of domestic farmers from increasing and not decreasing. The estimation and consideration of the sharp fluctuations in international agricultural product prices and their impact were insufficient, and the policy operation did not achieve "minimum" and "temporary". At present, the market price of agricultural products in our country is generally higher than the international price, which leads to the rapid growth of agricultural products import, which begins to distort the rationality of price change and impact on the international market. If no new mechanism to protect farmers 'interests is introduced in time, the next production development, market regulation and government expenditure will fall into a dilemma.