On the volatility of China's grain market

Introduction: from May 10, 2004, since the 1980s, China's grain market has experienced four major national fluctuations, which has aroused the response of urban and rural people and the close attention of Party committees and governments at all levels Due to the effective measures taken, the contradiction between supply and demand has been basically alleviated, and the grain market is generally stable But the great fluctuation of grain market brings us profound enlightenment I The four major fluctuations in China's grain market since the 1980s, with the deepening of China's grain market-oriented reform, grain purchase and sale have gradually turned from the unified operation of the original country to multi-channel circulation, grain prices have gradually turned from the unified pricing of the original country to the formation of market supply and demand The planned regulation mechanism is replaced by the market regulation mechanism, and the fluctuation of grain market is more and more obvious Since the 1980s, there have been four large-scale fluctuations in China's grain market From 1984 to 1989, due to the promotion of the system of contracted responsibility for joint production in rural areas, the grain output of 83 and 84 countries increased substantially in two consecutive years, and the total grain output of the country reached 407.3 billion kg In the face of this good situation, in 1985, the state carried out the grain price reform again, cancelled the grain unified purchase, changed it to contract purchase, changed the past policy of over purchase and price increase into the policy of purchasing at a proportional price, the actual level of the price was lower than that of the previous two years, and the signal to the farmers was that the state did not need too much grain, and the grain production was rapidly declining In addition, the agricultural disaster in that year reduced the grain planting area 60.58 million mu less, and the output decreased by 28.2 billion kg compared with the previous year After that, the supply and demand of grain has been in a state of tension for five consecutive years In 1989, in order to change the depressed situation of grain production, the state raised the purchase price of grain again and achieved good results In 1993, the country's total grain output exceeded 450 billion kg, and the situation of "difficult to sell grain" continued to emerge In order to protect farmers' enthusiasm for grain production, the State Council decided to establish a special grain reserve system and implement a minimum protection price for the purchase of negotiated grain Nevertheless, the problem of selling food is still a problem From 1995 to 1998, the state carried out a series of encouraging policies, especially in 1995 and 1996, grain production increased for two consecutive years, and the per capita share of grain reached 385 kg Since the second half of 1996, it has been difficult to sell grain again The national grain price has fallen sharply, especially corn in the northern market During this period, the grain price was basically at a low ebb Since October last year, grain prices have been rising rapidly, which is unprecedented in history It is the first overall rise in nearly six years For the explanation of the price rise of grain, oil and food, the consensus is that grain production will be reduced The data shows that China's grain output dropped from a record 512.3 billion kg in 1998 to 457.06 billion kg in 2002, a decrease of 10.78% On this basis, in 2003, the output of summer grain decreased for the fourth consecutive year, with a year-on-year decrease of 2.4% What is the main reason for the reduction of grain production? Authoritative data show that the crux of agricultural production reduction lies in the linear decline of cultivated land area In 1998, the grain crop was 113.787 million hectares, and by 2002, it had decreased to 103.891 million hectares, a decrease of 8.7% 2 The main characteristics reflected in the fluctuation of grain market 1 It is inevitable to develop the fluctuation of grain market in market economy Price is the basic element of grain market To promote the process of grain market reform, in fact, it is the process of forming price by market supply and demand instead of national unified price Because the supply and demand of grain is a relative balance formed in the dynamic, when the supply is greater than the demand or the demand is greater than the supply, the fluctuation of grain market will inevitably occur, and the degree of fluctuation is generally determined by the size of the contradiction between supply and demand 2 The impact of grain market fluctuation is twofold The essence of the fluctuation of grain market is the response of the law of grain supply and demand and the law of value, which is like an invisible hand, regulating the interests of producers, operators and consumers The result of its function is twofold It can not only promote the production and circulation of grain and adjust the balance of supply and demand, but also affect the production, cause market shock and social stability 3 The fluctuation of grain market also has certain periodicity The fluctuation cycle of grain market is closely related to the fluctuation cycle of grain production There are only some sensitive reactions and some lag reactions between the two The fluctuation cycle of grain market can be followed For example, since 1984, the supply of grain has exceeded the demand and the price of grain has fallen After the balance of supply and demand, the price of grain has rebounded The demand is greater than the supply and the price of grain has risen Until the supply is greater than the demand and the demand is greater than the supply again, it is generally analyzed as a cycle of five or six years Third, the inspiration brought by the fluctuation of grain market with the deepening of the reform of grain market, people's concept of planned economy is constantly changing, the fluctuation of grain market is never recognized, never adapted to The impact brought by the fluctuation of grain market gives us profound enlightenment 1 The fluctuation of grain market is a reflection of the law of value and an inevitable phenomenon under the condition of market economy First, the objectivity of the contradiction between the supply and demand of grain If we admit that there is a contradiction between supply and demand for grain, there will inevitably be fluctuations in the grain market Second, the inevitability of market supply and demand forming price The grain market should reflect its supply and demand Due to the different situation of grain supply and demand in different periods, the grain prices formed through the market will be high and low The different changes of grain prices will naturally cause market fluctuations The third is to implement the guidance of open multi-channel market competition The reform of grain marketization has broken the monopoly of grain management With multi-channel and multi-component participation in grain circulation, the competition will become more and more fierce It can be said that under the condition of market economy, the fluctuation of grain market is inevitable and the inevitable result of the function of value law 2 We should correctly understand and judge the positive and negative effects brought by the fluctuation of grain market It should be affirmed that the fluctuation of grain market will play an important role in promoting grain production and circulation For example, from 1993 to 1995, the price of grain increased by a large margin several times, which made farmers feel profitable to grow grain, and the enthusiasm to increase grain production was further enhanced Since October last year, food prices have risen in an all-round way, which has attracted the attention of all sectors of the society The Party Central Committee and the State Council have introduced many measures to benefit farmers, which has aroused the enthusiasm of farmers to grow food Of course, it can not be denied that the fluctuation of grain market will bring some negative effects For example, the rising price of grain will affect the economic life of urban residents, especially the difficulties brought by some low-income families, causing people's ideological unease Therefore, we should not only see the positive side, but also the negative side for the fluctuation of grain market In the fluctuation of grain market, we must prevent two problems: one is to prevent the price from falling after a big rise, which once again dampens the enthusiasm of farmers to grow grain Second, grain is the basis of 100% price We should prevent the price increase in turns and chains, and affect social stability 3 We should not "overreact" to the fluctuation of grain market, especially the current price rise The recent increase in food prices should have been the most important concern of farmers, because it is related to the increase of their own income However, there is a phenomenon in the rise of food prices, the voice of non-agricultural groups is high, and the voice of farmers is weak This kind of phenomenon is easy to form a tendency or atmosphere of "underpricing" for agricultural products in the society, which leads to the exaggeration of the "demonstration role" of agricultural products in the price chain, which is not conducive to the increase of farmers' income and the solution of the "three rural" problem Some experts have analyzed that the "overreaction" to the rise of grain price will inevitably lead to two results: first, the price rise of agricultural products will soon be "followed up" by the price rise of agricultural materials, and the latter wave will surpass the former wave, which will not only offset the part of the increase in the price and income of agricultural products, but also may be too late, further reducing the comparative benefit of grain production This problem has already appeared The second is that the "false price increase" will strengthen the "demonstration pull" effect of agricultural product price increase on the total price level of social commodities Agricultural products in the "price chain" in a disadvantageous position, a direct impact on the increase of farmers' income It's still a kind of planning thinking that we can't be nervous when food prices rise or fluctuate The rise of grain price does not violate the requirements of the new round of "grain reform", we should adopt the appropriate response strategy of "loosening the outside and tightening the inside, rational regulation" and innovate the means of regulation and control 4 We should use the method of market economy to deal with the fluctuation of grain market As the fluctuation of grain market in the new situation is quite different from the previous system background and market development, Li jingmou, a grain expert and general manager of Zhengzhou grain wholesale market, put forward that the realistic method is to actively build a modern grain market system and solve the market problems with the market method First, we need to ensure that the total amount of food is balanced To keep the total grain output stable, we must protect the basic farmland In order to ensure food security, the state has introduced the strictest farmland protection system and cherished every inch of land While strictly protecting the basic farmland, we should protect the lifeline water source of agriculture, improve the utilization rate of water resources, protect the existing ecological resources, prevent soil erosion, improve the ability of agricultural science and technology innovation, and maintain the ability of sustainable grain production Second, establish and improve the grain reserve system and the grain emergency warning mechanism Grain is a necessity of people's life and an important industrial raw material It seems unimportant at ordinary times, but it can't do without it Its production is seasonal and consumption is regular We need to establish an early-warning mechanism and improve the emergency system In case of an emergency, we need to use reserves to maintain food security and maintain social and economic stability Third, the production and marketing areas should build reasonable channels for grain circulation Driven by interests, it is easy to lead to regional blockade It not only hinders the normal grain circulation among regions, but also easily causes the false phenomenon of market supply and demand, artificially increasing the contradiction between supply and demand It is an important link to cultivate and establish relatively stable channels of grain circulation in production and marketing areas, and to straighten out grain circulation, which tends to be normal Therefore, the production and marketing areas should establish a long-term stable and mutually beneficial regional cooperation mechanism in accordance with the requirements of market laws, embody mutual benefit, achieve win-win, and ensure a stable relationship between food supply and demand throughout the year Fourth, we should make proper use of the international market to ease the contradiction between domestic supply and demand From the perspective of the total balance of grain supply and demand in China, in order to make up for the shortage caused by the decrease of population and land and the expansion of indirect demand for grain in the future, it is necessary to increase grain import moderately Due to the vast territory of our country, the economic conditions and development advantages of different regions are different Different regions have their own entrances and exits, and it is normal for them to go in and out It is necessary to strengthen the analysis of international and domestic grain market information, grasp the opportunity and time, and prevent the problems of lag and reverse regulation.