An Example Of Study On Paddy Pricing Mechanism

Paddy is one of the three important grain corps, so the study of its pricing mechanism makes great sense to the study of food problem. The long-term's reform of China's paddy pricing mechanism is unsuccessful totally for the reason of it is rather complex. The reform process is as followings:free market prices system-government prices system-double-track prices system-towards market-oriented prices system.In 2004, the government freed grain markets in purchases and sales and carried the policy of multi-channel operation. As a result, there are more and more proper buyers, so the competition in this field is becoming more and more serious. In addition, China's CPI index in recent years rises fast. All these make the paddy prices fluctuated violently and increase the risk of the person who plant and operate paddy day by day.Our country pushed "Early Rice Futures" in Apr 20th 2009 in the hope of stabilizing its price. So, it is necessary to study and hold the paddy pricing mechanism as to offer some helpful suggestions in stabilizing the domestic paddy market and protecting the paddy participants'interests.I analyze the paddy pricing mechanism with qualitative and quantitative analysis of a combination method in this paper. In the first place, I brief introduce the paddy spot market and the evolution process of its pricing mechanism. In the second place, I make a qualitative analysis about its pricing mechanism and find out the main factors affected the price by regression analysis. In the third place, I take early rice as an example to make an empirical analysis of pricing mechanism. I test whether the futures market is effective and find out the key factors affected the price of early rice by regression analysis. At last, I offer some policy proposals basing on the previous study.By the previous study I make the following conclusions:The steady paddy price plays an important role in stabilizing the economic society's steady development. However, its own instability character and its function to maintain social's security is always a contradiction. This is the reason that government's macro-interference always stops the paddy price towards market-oriented price all the time. By the effectiveness analysis, I find that there has a co-integration between futures and spot market, and the futures market is weak form efficient. The key influence factor is its yield, price index and futures prices. The list of early rice futures can provide an effective means to avoid risk for paddy participants and also perfect the pricing mechanism.By the analysis result, I offer the following policy proposals:set up a complete paddy market system, cultivate the paddy champion enterprise to play exemplary and leading role, concentrate on futures market's improvement, increase input in paddy plantation industries, and constantly perfect the construction of law in paddy related market.