New agricultural subsidy policy is urgently needed in China

Introduction: the price of oil rises and the price of food falls China's farmers have just experienced a rare good year in 2004 when agricultural taxes were abolished, grain prices rose, and production and income increased This year, they will face new challenges again The continuous increase in the prices of means of production such as fertilizers and pesticides has not yet been digested The increase in energy prices has once again diluted the joy of "three to five extra tons" for farmers According to the monitoring of major grain and cotton producing counties and cities by the national development and Reform Commission, as of the end of August this year, the price of chemical fertilizer still increased by a large margin In June, the average retail price of major varieties of urea, potassium fertilizer and compound fertilizer increased by nearly 20% year on year, even in some regions "Since last year, the relevant ministries and commissions of the state have implemented price limit measures on the ex factory price of chemical fertilizer of major large-scale chemical fertilizer production enterprises, but the effect is not obvious." Han Yijun, director of the Market Research Office of the rural economic research center of the Ministry of agriculture of China, said The increase of transportation cost caused by the rise of oil price is increasing the production cost of agriculture However, the National Bureau of statistics released a statistical bulletin on August 11, which showed that in July, the national food price fell by 0.9% while the overall level of consumer prices and food prices were generally higher than last year The cost of production keeps rising, so why not raise grain prices instead? The reason is explained in a "outstanding problems in the current grain market and the trend of grain price in the later period" issued by the national development and Reform Commission: since the end of 2003, the grain price has risen by a large margin twice, and grain enterprises generally believe that the possibility of grain price rising again is very small, so the enthusiasm of market purchase is not high Moreover, some grain enterprises purchased grain at a higher price last year, and the sales have been not smooth since this year In addition, farmers are in a weak position in the formation of food prices, which makes it difficult to form a relatively unified market power In addition, they generally lack market information, so they can only passively accept market food prices Han Yijun, who is concerned about grain trade, also believes that "this year's decline in grain prices is closely related to the steady decline in international grain prices since 2003."                              In the above-mentioned documents, the national development and Reform Commission predicted that "it is expected that the purchase price of wheat and early rice will remain basically stable in the later period, and the price level may be slightly lower than that of the same period last year, especially during the period of relatively centralized grain listing from July to September, the market price of wheat and early rice will hardly rise, but the price will not fall much further." According to this judgment, compared with 2004, under the situation of rising cost and falling food price, the possibility of increasing farmers' grain income this year is very small In 2004, the state implemented a series of preferential policies for farmers in rural areas: a total of 11.6 billion yuan of direct subsidies were arranged nationwide to expand the scope and scale of subsidies for improved varieties, and special funds were arranged to subsidize the purchase of large-scale agricultural machinery and tools by farmers in some areas In this year's "No 1 document" of the Central Committee of the Communist Party of China, it was also clearly pointed out that "we should continue to provide direct subsidies to grain farmers, and where conditions permit, we should raise the level of subsidies." We will significantly increase subsidies for improved varieties and agricultural machinery purchases " However, so far, the country has not introduced a new agricultural subsidy policy just for the rise of energy prices Han Yijun revealed that the Ministry of agriculture and other relevant ministries and commissions have realized the fact that the rising prices of energy and other means of production squeeze the profits of producers, and are looking for new ways to ensure the interests of farmers.