The Analysis Of Price Lfuctuations Of Agricultural Products From The Circulation System

Agricultural prices have been significantly increasing in2010, especially garlic,tomatoes and cabbage and other vegetables. Point of view from the circulation system,the vegetables as the representative of agricultural prices, should be mainly due topoor circulation system of agricultural products, and the lack of effective integrationamong the circulation, resulting layers of monopoly fare in intermediate links whichsubstantially raised retail price, the imbalance between supply and demand ofagricultural products,and rising of production costs further amplified final retail pricethrough the layers of monopoly fare. According to our model estimates, an additionalcirculation will be doubling the prices of agricultural products. We propose toencourage the vertical integration to be implement in the circulation of agriculturalproducts.Between wholesalers and retailers should be introduced competition,improve the economic value added in the middle part and expand theagriculture-related business activities in space in the terminal part. We believe that,instead of indulging in suppressing the hot money speculation in agricultural products,it is better to guide the hot money to participate in the circulation of verticalintegration or competition, deepening the division level, which will increase the levelof social welfare.