Research Of China's Grain Price Volatility And Regulation

As the saying goes "Grain is more important than anything else." Premier Wen said "If we have grain in hand, our hearts will not be panic". The slang or quotes are all in the clear to the extreme importance of grain. Grain as an important commodity in the social and economic life play an important role in both the necessities of grain, but also is an important strategic products. In the war, famine and other extreme conditions, the amount of grain determines the success of the war, and the political stability. In addition, grain is an important industrial raw materials and feed ingredients, grain prices as a percentage of base price, affects the interests of all parties. In China, However, compared with the growing grain demand, China's grain production is faced with severe resource endowment constraints:First, the shortage of arable land resources, and second, the shortage of water resources and uneven. From the international environment, many countries prohibit the export of grain, and our country is facing increasingly serious international situation. Grain security as a public good is to ensure that an important part of national economic security. And is price regulation is very important to ensure national grain security measure. In the market economy, price is the core of the economic system, and guide the direction of resource allocation. Since the second half of 2006, a new round of rising prices of agricultural products into the cycle, as the most basic agricultural products-grain, its price volatility and control once again aroused public concern.And the regulation of grain price fluctuations have a profound theoretical meaning, deep political background and outstanding realistic basis.Through explore the theoretical and empirical analysis, using historical, comparative, and other measurement methods,I try to find the answers to these questions:what characteristics does the grain prices show? Which factors influence and constraints? What is the effect of grain price fluctuations? How to build and improve the regulatory system of grain prices? In this paper, the relevant domestic and international regulation of the issue of grain price fluctuations and results were reviewed, based on the first analyzes the characteristics of grain price fluctuations. Respectively in 1978 and in 1985 as the base,comparing the nominal and inflation-adjusted grain prices.They show different characters. Price index compared with the other view, the grain prices based 1978 are higher than the agricultural prices, PPI, CPI's rise, while in 1985 more than the base period, grain prices showed price level and other characteristics of alternate operation. In addition, about 2007,2008, qualitative issues of rising grain prices, from the nominal price.They are more than the record high, leading a new round of price increases; prices from the inflation-see, it is rehabilitation rise.Secondly, this paper separately from the cost of production, consumption, reserves and import and export analysis of the causes of grain price fluctuations.The total cost, cash costs, material costs, labor costs and land costs, the cost of grain prices in terms of factors are analyzed, and the following conclusions:-the total cost of grain and cash cost are in a period of time show some stability, and show "ladder-type" rising features. After the mid-90 years,20th century, the total cost of grain, cash costs stable, less impact on the volatility of grain prices. Fertilizer costs and lease operating costs are the most important component of material costs, and we should focus on the regulation of the fertilizer. Labor costs increased significantly, but the proportion of the total cost decline. This paper constructs "daily average remuneration" index used in calculating the grain farmers'profits in a standard working day in an acre. Compared with the workers in other industries, it shows that grain farmers do not have access to social average wage and labor income. Land costs increased significantly, and the impact on grain prices has enhanced the trend.The impact of grain supply and demand on the price fluctuations. On the one hand, production changes inversely with the price; the other hand, the influence of the production on the price decreased. In the long term, the grain consumption and the prices is consistent. In the short term, the production-demand gap (surplus) indicates the price fluctuations. The period of greater gap is also the period of price rising. And when the production and demand gap appears narrow, or appears surplus, the price decline. Third, this paper analyzes the economic effects of the grain price fluctuations from the production effect, the income effect, and the price effects. The sensitivity of the grain price is low, in other words, the area of the grain production is not senstive with the price. In contrast, the highest sensitivity to price fluctuations is rice, followed by corn and wheat. Based on the estimated contribution of grain price fluctuations in income, the income effect shows that the grain price increases, the farmer's income increases; the grain price decline, the farmer's income doesn't change, or declining price had no effect on the farmer's income. Grain as the representative of the primary industry, its price's influence on the family income of the farmers showed seasonal variations, in the first quarter, it is the least impact, in the fourth quarter, it is the largest contribution. The price effect analisis shows that its our misunderstanding that the sharp rise in grain prices is equivalent to the sharp rise in CPI inflation; the food price contribution to CPI equals to the grain price contribution to CPI. The grain price effects are uncertainty.Next, on the supply and demand factors affecting future grain prices do trend analysis and forecasting. Because the supply is uncertainty, I will focus on the demand forecast. Perspective based on rational nutrition, control the structure of grain consumption the total demand of grain in 2020 was about 610 million tons, increasing about 90 million tons than 2008. The feed use of grains will replace the food as the first use of the grain. Corn will replace the rice become the largest varieties of grain, and soybeans demand is strong. Therefore, we need to adjust grain production strategies, focus resources on maize production, strictly control industrial use of grain growth, and guide people to a reasonable diet,Finally, the paper reviews the regulation of China's grain price evolution, summed up the evolution characteristics of China's.grain price policy, assessment of the current problems in price regulation and the minimum purchase price policy performance, and reference to the U.S. and EU regulatory experience of grain prices. Current regulatory policy has the following problems:grain prices led by the administrative means, control objectives are too diverse, the tendency of severe short-term regulatory policies, regulatory costs are high, and the efficiency is low. From the United States and the European Union regulatory policy practice, we can see that the two never give up the huge subsidies on grain. They pay more attention to price regulation on grain law, and more emphasis on market-oriented by means to control grain prices. China's grain price-control system should be builted from the following aspects:grain price policy needs to clarify the objectives and principles of regulation; speed up the regulation of grain prices in China's legislative process. Make the counter-cyclical payments to the income support system to replace the existing minimum purchase price policy in order to speed up the market-oriented reform and reduce the cost of grain price regulation; Reconstruction grain regulatory agencies in China, such as establishing the national grain control center, reconstruction of the functions of the Agricultural Development Bank.The innovations of this paper are as follows:first, based on the Marx's labor theory of value, construct "daily labor remuneration" indicator. Second, build the "sensitivity of the grain prices fluctuations" indicator. Third, based on the structure of grain demand in the future rather than the total demand forecast the trend of grain price.