How to crack the rise in the price of agricultural products

Judging from the two factors of supply and demand, there is no problem in maintaining the basic balance between China's grain production and consumption for some time to come. Therefore, there is no reason for food prices to rise and fall sharply.

However, external factors are not optimistic. Western countries' annual grain subsidies of about 300 billion US dollars and encouragement of fallow are one of the important reasons why international food prices remain high. Another important factor is the quantitative easing monetary policy implemented by the US government after the financial crisis, which, to put it bluntly, is the indiscriminate issuance of money to eliminate the huge debt caused by the financial crisis, leading to a rise in the price of global resource products.

How to crack the rise in grain prices

A normal market economy country does not allow speculation, but leads speculation to innovation.

The purpose of curbing speculation and industry access is to prevent a price spiral; the main measure is to disclose information to accept public supervision and resolutely crack down on illegal speculation.

China Economic Times: so, what kind of attitude should we take towards the rise in food prices?

Ding Ningning: I personally think that grain prices should rise slowly. From the history of industrialization in western developed countries, because the improvement of agricultural production efficiency is much lower than that of manufacturing, there is an obvious scissors gap between agricultural products and manufacturing products. However, if the price is too low, no one will engage in agricultural production, thus affecting the basic needs of human survival. Therefore, in the long run, contrary to industrial products, the price trend of agricultural products is rising slowly.

Judging from our policy practice over the past 10 years, the state grain purchase price "rising steadily" is also completely correct. The state purchase price increases by 5% to 10% every year, which not only protects the interests of farmers, but also stabilizes grain production. Of course, the sales prices of agricultural products are also "steadily rising", but the structural prices fluctuate greatly. That is, the price of small varieties of grain fluctuates greatly, while the price of high-quality grain varieties fluctuates greatly. There are both reasonable and unreasonable factors.

After the reform and opening up, we have gradually liberalized the price control over the agricultural products market, and we cannot return to the planned control state in the past because the current prices of some agricultural products are too high. Under the conditions of a general market economy, the right thing to do is not to take price control measures for those agricultural products whose prices are rising too fast, but to encourage production and curb speculation.

Since the industrialization of the West, any traditional industry has been protecting its own producers, keeping the price of its products stable, and not allowing speculative funds to enter casually. If foreign funds want to enter, they must identify themselves, or at least have a good record. Now we come and go without a trace. The reason is simple: many people understand that the market is a speculative market. For example, Wenzhou real estate speculation groups everywhere, local government officials are also very welcome. I can't wait for them to speculate on housing prices so that they can sell land and governments and businessmen join hands to engage in land speculation. A normal market economy country does not allow speculation, but leads speculation to innovation, such as NASDAQ in the United States. We advocate too much competition in agricultural products and grain markets, and lack industry access rules, which is why there are abnormal price fluctuations.

In the end, the agricultural products and grain markets of western countries are relatively oligopoly. We do not allow domestic enterprises to monopolize, but we are monopolized by international giants. This is the biggest mistake of the government.

There must be a national team in the grain market. The national team is not necessarily a state-owned enterprise. The so-called national team is a domestic monopoly with which the government can communicate and influence market prices through them. I think we should cultivate this kind of enterprises, not break them up and let foreigners control them. This involves the issue of industry and market access. To put it bluntly, there are two things: one is to register when entering the industry, and the other is to encourage domestic grain merchants to become bigger. It should be noted that the problem in edible oil is even greater. We basically do not have our own enterprises, all of which are foreign capital. The golden arowana and the Luhua are all controlled by foreign investors. How do you negotiate with others? Why not let others raise the price? The purpose of curbing speculation and industry access is to prevent a price spiral; the main measure is to disclose information to accept public supervision and resolutely crack down on illegal speculation.

Why there is chaos in the grain purchase market

Even if industry access measures are taken, grain purchasers should conclude long-term contracts with farmers instead of negotiating at the time of annual harvest, otherwise it will be unfair to farmers.