Food required to return to market pricing in long-term

Recently, the NDRC issued a number of consecutive files, respectively staple agricultural products 17.26 4.92% market regulatory system and mechanism, the minimum purchase price and the temporary storage of food grain and oil acquisition policies, and "Cold Chain Logistics agricultural development plan." Subsequently, the National Development and Reform Commission has expressed on corn imports, the bulk of China's WTO accession will be the first time, imports of corn, to curb excessive domestic corn prices, rising too.

This series of policy combination punches are too fast to prevent the rising prices of agricultural products, of which the most prominent regulatory policy is the backbone enterprise "incorporated" into the agricultural market control system. According to the NDRC and other 12 ministries Fabu's "On key enterprises play an active role in sound and improve the government right bulk Nongchan Pin control system and the market mechanism the notice" Lei Si in the grain Jituanzheyang the company Huo will Zai Zhong Yang and Hong Guan Di Fang of agricultural regulation occupy an important place.

Prices have set off waves in the first half of garlic, ginger, green beans and other agricultural products, the current price inflation again. As grain production declined 0.3%, while the current weather in various parts of China facing serious disasters such as the production of rice in Northeast floods, the South also faced attacks flood a large area, in the autumn cut expected strong currency excess liquidity led to a climate of intense speculation in the double factor stimulation, the Chinese agricultural prices rose sharply in the second half may even spread from the grains of rice, corn and other staple food. The composition of food in the CPI in China, the highest weight, so in the second half to keep CPI at 3% and enormous pressure for 3 months if more than 3%, interest rates will be forced to make adjustments.

This prospect of China's economic growth variables. At present, China is facing a steady decline in industrial growth pressure, the Chinese Federation of Logistics and Purchasing released on August 1 the data show that in July manufacturing PMI (PMI) reached its lowest level in 17 months, but remain at 50% economic expansion and contraction over the line. However, HSBC's China July PMI release show, has fallen to 49.4%, 16 slightly wounded less than 50%, indicating that chain manufacturing business conditions weakened. In addition, due to weakened and the local real estate investment financing is inhibited, the economic downturn stressful. Therefore, if inflation in the second half forced to raise interest rates, weak growth in the economy will be further blow.

Therefore, in the second half of the main tasks is to prevent inflation, more accurately, is to prevent farm prices. However, prices of agricultural products to promote some of the factors is very reasonable. For example, cut and cut expectations about market supply; Second, with large-scale asset prices and wages rise, prices of agricultural products with the need for reassessment, and sufficient liquidity to provide support for the revaluation. However, the current regulation of agricultural markets dominated mainly by administrative means, the prices attributed to speculation, and complemented by legal means. But this is difficult to precisely control, because the policy is difficult to distinguish between price fluctuations which are speculative behavior, which is reasonable prices.

The so-called "core business" (ie state-owned enterprises) into the macro-control system, mainly to control and prevent the commercialization of state-owned enterprises have been involved in market manipulation and speculation, amplified fluctuations. However, this incorporation of the interests of business and Food and Agriculture may also have a negative impact, if the price is too suppressed, while the market is expected to cut the strong, it could lead to a large area for food and agriculture reluctant sellers, so the supply is more scarce, increasing the price resilience.

It should be said that the Chinese long-term low food prices hovered in the second half of 2004, China suddenly confronted by Abandoned food supply caused by reduced prices and short-term inflation occurs. Since then, the continuous increase in production by the abolition of agricultural taxes, increasing financial subsidies to stimulate, rather than the price attractive. Once the growing income and rising cost of subsidies gradually swallowed, and long-term stability of grain prices, then, due to rising wage workers, the grain may still uncultivated. Thus, while being inhibited by administrative means the price in front of the overall economic benefit to run, but medium to long term, food must return to market pricing, and subsidies should increase the intensity. In fact, the agricultural planting income determine land prices and the minimum wage, is the decisive factor affecting China's transformation.

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