A Study Of Farmer’s Production Decision And Agricultural Products’Fluctuation

At present, China is undergoing the process of transition towards market economy, featuring increasingly closer connection between farmers’economic behaviors and market. In addition, farmers have begun to make resource allocation and production decision-making based on their response to market prices, leading to the more complicated process of production decision-making. In particular, in the wake of the continuously upgraded market openness degree in China, farmers are facing with wider market scale and more uncertainties, have been increasingly under the influence of market price fluctuation and marker information when making production decision. Theoretically, on the one hand, market prices, as signals conveyed to farmers, can impact on their production decisions and behaviors of next period; on the other hand, farmers’ decision-making behaviors have also influenced on the price fluctuation of agricultural products; the categories and amounts of farmers’production can impact on the supply of agricultural products, which will further impact on the prices of agricultural products. In reality, fanners’failure of responding to market changes in time and adjust their production decisions may give rise to the situation of "producing and stop producing some agricultural products collectively", bringing about the changes in supply quantity of agricultural products. Moreover, Chinese farmers feature small production scale and decentralized operation; the totaling of the production decisions of a large amount of small-scale farmers may cause the dramatic variations of total quantities of agricultural products in the market and substantial fluctuation in agricultural product prices. Therefore, it is of important significance to discuss farmers’production decision-making behaviors, analyze the rules and influential factors of price fluctuation of agricultural products, explore on the role played by the interrelationship between farmers’decision-making and price fluctuation of agricultural products on relieving price fluctuation of agricultural products and guiding farmers’production practice.This paper selects fruit vegetables, featuring higher marketization degree and wider household consumption, as research objects; applies micro data to conduct an in-depth analysis on farmers’ production decision-making behaviors and influential factors; adopts macro data to analyze the features and influential factors of price fluctuation of vegetables; and on this basis, explores the relationship between farmers’ production decisions and price fluctuation of agricultural products as well as its influences. The concrete research idea is as follows:firstly, this paper combs and summarize theoretical bases, such as economic theory, farmers behavior theories and price theories, to lay a theoretical foundation for the analysis in later paragraphs; this paper explains the reasons to choose fruit vegetables as my research object and data resources, and conduct the descriptive statistics on the basic information of fanners’ survey sample; secondly, this paper adopts survey data to analyze fanners’ decision-making behaviors, and focus on farmers’ scale adjusting behaviors, risk decision behaviors and response to market information during vegetable growing process, and apply Ordered Probit Model to conduct the empirical analysis on the influential factors of farmers’scale adjusting for vegetable growing; thirdly, this paper adopts macro data to analyze the rules of vegetable price fluctuation and the features and mechanism of price transmission in various links of vegetable industrial chain; fourthly, on the basis of building the analysis framework of farmers’ production decision-making, this paper adopts Nerlove Supply Response Model to conduct an empirical analysis on the response of farmers’planting area to vegetable prices, in order to measure and calculate the elasticity of supply of vegetable prices and discuss the influence of prices on farmers’production decisions; fifthly, proceeding from price theories, this paper conducts a theoretical analysis on the basic factors of price fluctuation of agricultural products, and based on this, this paper conducts an empirical analysis on the influence of farmers’vegetable supply decisions on price fluctuation of agricultural products; fifthly, this paper summarizes the major research conclusions and propose corresponding countermeasures and suggestions.The major conclusions of this research are as follows:Firstly, the analysis on farmers’production decision-making behaviors has shown that farmers’ attitudes toward risks are risk neural or risk aversion in general, and farmers’adjustment behaviors of planting scale are relatively conservative; farmers are aware of risk resources to some extent during the process of production decision-making, however, they are lack of cognition of the ways for risk aversion; farmers pay great attention of market price information, yet with relatively weaker abilities to apply market price information into decision-making.Secondly, there are numerous factors that influence on farmers’production decision-making, including decision-makers’personal characteristics, family characteristics and market factors. Whether farmers can make rational decisions are under the significant influences of their attitudes toward risks and abilities to apply market information. When making production decisions, farmers not only take profit maximization into consideration, but also take their family situations and limits of management abilities into account. At present, Chinese farmers have been under great influences of their planting habits, when making production decision. They usually maintain their traditional habits and the consistency with their neighbors. However, along with the deepening marketization, price can also be a prominent influential factor for fanners’ production decision-making; contrarily, farmers’ response to price information is hysteretic.Thirdly, there is a long-tenn dynamically balanced relationship of vegetable price fluctuation in industry chain. In the long run, during the conductive process of vegetable price fluctuation in various links of industrial chain, vegetable production prices (midstream) have been under the press of prices of vegetable means of production (upstream) and vegetable retail prices (downstream), namely the asymmetry.Fourthly, although one fanner’ vegetable production decisions cannot directly influence vegetable market, all the farmers who have nearly the same decisions might cause supply fluctuation and have significant impact on vegetable price fluctuation. The empirical anylyze shows the opposite direction between vegetable supply quantities of current period and prior period, this means the uncertainties of farmers’ production decision-making. Farmers’blind expansion and downsizing or retro-regulation behaviors may lead to the change in vegetable supply, and further influence on price fluctuation. Demand factors are not the principal ones triggering vegetable price fluctuation. Vegetable costs and profits also exert great influences on vegetable price fluctuation, driving farmers to adjust their vegetable supplies and further influencing on vegetable price fluctuation.Based on the conclusions mentioned above, this paper proposes suggestions from levels of governments, farmers, intermediary organizations and leadership enterprises, including strengthening the price warning service of agricultural products, promoting agricultural insurance, strengthening trainings and instructions for farmers, upgrading farmers’ qualities, positively prompting the development of cooperatives and encouraging contract farming.