A Study On China's Grain Price Volatility (1985-2010)

"People regard food as their prime want", food is a necessity for human survival. as a special commodity, food has always been valued by countries. In 1978, China adopted the family contract responsibility system as the core of the agricultural reform,moving away from a situation of chronic food shortages,achieving a basic balance between grain supply and demand. In 1985, China canceled the purchase and sale of food policy, Implemented the government grain purchase contract, allowed the acquisition of free trade of food that contract outside the acquisition. Since then opened the prelude to market-oriented reform of food prices.In theory, food supply and demand price affects the fluctuations of fundamentals of the grain market. In short term, as little change in constraints of demand for food by the population, culture, consumer preference, thus, changes in market prices of grain is mainly affected by the impact of changes in food supply.A certain period the current food supply is from food production and net imports of food. Natural disasters, food production and changes in the prices of grain yield affect the market price of grain by affecting food production; Food import and export influence market price of grain by affecting market demand and supply of food.Data analysis show that Chinese grain self-sufficiency rate is very high, Besides, the government are more stringen on food export restrictionst, thus the import and export of food is not obvious on grain market prices, from the supply and demand, Changes in domestic food production is the fundamentals of food price fluctuations. However,China's grain market is not high, food prices are still subject to government policies of the larger.Affected by the market price of grain, while the supply was affected by national policies, changes in relevant national policies with the up and downThe price of food is based for the million, so the excessive price fluctuations in food will have a major impact on the grain production in China, income of farmers, urban residents, especially low-income urban family life. It is also not conducive to Chinese sustained economic development and social stability. Basis of respecting the laws of the marke, China should improve the price formation of the new grain market mechanism, and prevent excessive volatility in food prices through various means of macroeconomic Control means.