Study Of The Mechanism Of Vegetable Price:Formation And Transmission

People mainly focus on food,while vegetable account for half of the food consumption.Vegetable occupy a pivotal position in people's diet.For nearly 30 years,China's vegetable industry gets rapid development.Total areas of vegetable have grown from 3.371 million hectares in 1978 to 1978 of 20.899 million hectares,which have increased by 5 times.Vegetable industry has created a huge benefit in the area of 'supply stabilization','income increasing' and 'foreign exchange earning'".While China's vegetable industry creates huge benefits,there are a series of problems at the same time.Among them,the most popular one is the price of vegetables,which can be seen in three aspects:firstly,the level of vegetable price is rising obvious;secondly,vegetable price plunged frequently;thirdly,the gap between vegetable production price and marketing price widened.Vegetable prices is related with people's livelihood and agriculture,and is the focus of the government policy,therefore,research on formation and transmission of vegetable prices is of great significance.In this paper,the main contents of research and conclusions are as follows:Firstly,This paper analyzed the characteristics of China's vegetable prices,clarified the problems of it.Seasonal fluctuations of China's vegetables prices were significant and vegetable prices rose at the same time.Vegetable producer price,wholesale price and retail price were synchronous;China's vegetable price had three problems,including rising and dropping suddenly and sharply,producers receiving less profits when price rose and spread expanding between vegetable producer price and consumer price;Abnormal climate,reduction of suburban vegetable land and information asymmetry were main reasons for the first problem.Rising vegetable production cost,less power to price for producers and vegetable overcapacity were main reasons for the second problem.The third problem was mainly caused by separation of the regions of production and consumption and also by too many intermediate circulations which add circulation costs.Secondly,this article studyed vegetables price formation mechanism in our country from the perspective of theory.1.This article put forward the theoretical framework of vegetables price formation mechanism in our country.The connotation of vegetables price formation mechanism in our country are as follows:in the short term,the vegetables price depends on supply and demand,in the long term,vegetable prices depends on the industry average cost,and the equilibrium prices fluctuate around the industry average cost.The formation mechanism of vegetables price in China include four parts:power system,transmission system,work system and control system.The running mechanism are as follows:under the function of supply and demand of vegetables,the fully competitive market forms vegetable prices,and in order to ensure the rationality of the vegetable prices,the invisible hand together with the visible hand adjustment the vegetable prices.2.This article constructed a general equilibrium system of vegetable industry.The equilibrium system of vegetable industry includes markets of production,circulation and sales.In the general equilibrium system,there are 6 endogenous variables:vegetable production,intermediate inputs,vegetable producer price,price intermediate inputs,vegetable consumption,vegetable consumer price.Endogenous variables are indispensable for vegetables general equilibrium system.In addition,there are exogenous variables,such as price of labor and capital of in the process of vegetable production,price of labor and capital of in the process of intermediate inputs,price of alternatives in consumer markets,houshold cunsumption expenditure.Under the impact of the exogenous variables,endogenous variables in vegetable equilibrium system will change a lot,but vegetable equilibrium system will eventually reach a new equilibrium.3.Through investigation,We summed up three pattens of vegetables circulation and analyzed three kinds of flow patterns of price formation mechanism.We mesummarized the circulation patterns of Shouguang vegetable as follows:the first one is circulation mode of large wholesale market;the second one is circulation mode of the local market;the third one is agriculture-supermarket jointing mode.Three kinds of circulation patterns and their mechanisms of vegetables price formation have the commonness and individuality.Garlic price formation in Jinxiang can be divided into three stages:new listed garlic(in the middle of May),new storage of garlic(in early July),garlic closures(at the end of August).Thirdly,this article analysed the transimission mechanism of vegetables price in China.1.This article clarified the concepts of mechanisms of vegetable price transmission and patterns.The transmission of vegetable prices refers to one kind of vegetable price cause other vegetables prices change,and the relationships and process of change refer to mechanisms of vegetable price transmission.The mechanisms of vegetable price transmission in China is divided into three pattens from the perspectives of industry chains,varieties and spaces.2.From the perspectives of vegetable varieties,we found that there are price transimission effects among each type vegetable.?Vegetable markets are endogenous systems.Granger causality tests verify that vegetable markets of Chinese cabbage,cucumber,pepper and tomato are endogenous systems.?Impulse response function and variance decomposition show that there are substitutional relationships in the system within the vegetables.Besides tomatoes,the impact of one kind of vegetable prices to other three kinds of vegetable prices are positive,and the prices of other three kinds of vegetables influence themselves when they are hit by shocks from exdogenous environment.Shocks from pepper price to vegetable market have biggest influence.Substitutional relationships between tomatoes and other vegetables such as cabbage,pepper and cucumber are relatively weak.?VAR-BEKK GARCH(1,1)model shows that there are spillover effects between varieties of vegetables price.Specifically,prices of pepper and cucumber have one-way mean spillover effects to Chinese cabbage and tomato prices,and there are two-way mean spillover effects between cabbage and tomato prices;there are significantly two-way volatility spillover effects between vegetable prices.3.From the perspectives of industry chains,we found that there are asymmetries when prices between each links in vegetable industry chains transfer.?Whether producer price or retail price,the positive impact of adjusting speed is greater than negative impact.?Whether positive impact or negative impact,adjustment of the vegetable retail price is greater than the vegetable producer price.The reasons of asymmetric price transimission are mainly as follows:market forces,the adjustment costs and menu cost,government intervention,asymmetric information,etc.4.From the perspectives of spaces,we found that there are spatial effects when vegetable prices transfer between different regions in our country.?There are obvious spatial agglomeration phenomenones.Prices of Chinese cabbage,eggplant,tomatoes and hot peppers have concentrated areaes of various degrees.In general,prices of vegetables in the eastern parts below the central and western regions.Besides the price of tomatoes,the price of cabbage,eggplant and hot peppers are obviously "high prices in the west but low prices in the east".?Vegetable prices in China are spatial correlation.The Moran values of prices of Chinese cabbage,cucumber,tomatoes,and hot peppers were 0.31,0.40,-0.11 and 0.31,respectively,indicating that our country's vegetable prices were not independent.There are positive correlationes among prices of Chinese cabbage,cucumber,hot peppers price,while there are negative correlationes for prices of tomatoes.?Vegetable prices in China are spatial heterogeneity.There are four types of agglomeration:high-high concentration,high-low concentration,low-high concentration and low-low concentration.?Spatial Durbin model showed that vegetable prices between the provinces in our country have significant spatial effects,that is to say,increase the vegetable production in the region can reduce the neighborhood vegetable prices.?From the study of spatial integration of China's vegetable markets under the background of 'south-to-north vegetable transfer',we found that:the degree of integration was becoming increasingly high.the degree of market integraton between north and south China was lower than within north and south China,further more,the degree of integration in the north market was higher than the south.The possible innovations are hereinafer:?This article put forward the theoretical framework of mechanisms of vegetables price formation in our country.In the theoretical framework,we defined the concept of mechanisms of vegetables price formation in our country,clarified the connotation of mechanisms of vegetables price formation and analyzed the parts of mechanisms and its running mechanism.?This article constructed a general equilibrium system of vegetable industry.This general equilibrium system depicted the mechanism of vegetables producer prices and consumer price,and portrayed the effects of exogenous shocks to vegetables producer prices and consumer prices as well.?This article analysed the transimission mechanism of vegetables price in China from the perspectives of indurstry chains,varieties and spaces,which is innovative.Past researchers focused on the perspective of industrial chain,but were lack of attentions on the perspective of varieties and spaces.