The Study On The Managing Policies Of China’s Agriculture Market

The stabilization of agricultural market is very important for a country. Governments show high lights on agricultural price fluctuation because it might incur social unrest and macroeconomic unstable. In 2004, the grain purchase market is completely open, the market reform of agricultural products in China is basically completed, and the market mechanism plays a decisive role in the operation of agricultural products circulation system. At the same time, in order to ensure the effective supply of agricultural products, farmers’ income and avoid fluctuations in the prices of agricultural products, the Chinese government has taken a series of policy measures to stabilize the market of agricultural products. Under the guidance of these policies, China’s grain output of major agricultural products increase year by year,the domestic market supply and demand basically in balance, the income of farmers continued rapid growth, to maintain social harmony and stability up to pivotal role.In recent years, with the constant change of the international economic and political pattern, the development of urbanization and industrialization in China and the relationship between supply and demand of agricultural products has changed to a new structure. In order to deal with the new problems that may arise in the market of agricultural products, the managing policy is more scientific and effective, and the Chinese government is actively trying to improve the existing market regulation and control policy system of agricultural products. Especially since 2014, the government is to rationalize the price formation mechanism of agricultural products, improve the existing market regulation and control policy system as the focus of the three rural work. Under this background, it is of great significance to comprehensively study the regulation policy of agricultural products market in China.This paper analyzes the fluctuation of China’s agricultural products trends and characteristics, and the use of B-N decomposition and ARCH model to study the main factors affecting the price fluctuation of agricultural products, explore the formation mechanism of the price of agricultural products; secondly, the system analyzes the development of regulatory policy, market of agricultural products in our country and the characteristics of evolution since the reform and opening up, as well as related the experience of the United States, the European Union and Japan agricultural product market regulation policy and Its Enlightenment; thirdly, the Xinjiang cotton target price subsidy reform pilot as an example, through the investigation of typical cases and summarizes the reform target price subsidies pilot gains and losses, using VECM model and impulse analysis verified the effect of policy implementation; finally, the main conclusions is based on the research, put forward relevant suggestions the current optimization policy of agricultural products market in China.Basic research conclusions are as follows:First, through study of agricultural product price fluctuation trend and characteristics since the reform and opening up of our country, we found that after 2003 agricultural product price fluctuation has eased, but the emergence of shorter cycle fluctuations and structural price increases; in the regions of different levels of economic development, the agricultural product price fluctuation characteristics exist significant differences.Second, through the study on the main factors affecting the prices of agricultural products, we find that macro-economic fluctuation, money supply changes, changes in inventory, and the fluctuation of the international market and many other factors are affecting the agricultural product price fluctuation in China.Thirdly, by studying on the development and composition of China’s agricultural market managing policy system we can find that:Since the founding of the development of China’s agricultural market managing policy experiences to explore the policy of the beginning of the new China, unified purchase and marketing of the reform and opening up of the market recovery, comprehensive support period and the reform period(2014 to date). At present, China is experiencing a more radical agricultural market reform mechanism.We divide the policy system into three parts: the procurement policy, trade policy and agricultural subsidy policy. Our study found that China has established a relatively complete system of agricultural market regulation policy system in order to support agricultural production and increase farmers’ income. However, due to domestic and international situation changes, Chinese policy system is now facing with many difficulties: large stocks, imports increase, tariff inefficient have threatened many industries. These situations make the managing of agricultural market even more difficult.Fourthly, in order to deal with the difficulties above mentioned, we review the policies of USA,EU and Japan.These countries and regions have some difficulties in national conditions and different agricultural productivity, goals and tools to choose are also different. These countries and regions have also appeared similar policy bottlenecks in our country right now. The basic idea to solve the problem is to gradually reduce direct intervention in the prices of agricultural products, reduction the use of distortionary policies. US, EU and Japan are all beginning to emphasize the importance of risk management of farmers, especially the revenue insurance. The policy targets are specific and mostly are expressed in the form of law.Fifth, through the Xinjiang cotton target price reform pilot research and empirical research found: From the positive point of view, this reform will help to enhance the international competitiveness of China’s cotton industry, reduce domestic cotton prices, is conducive to the textile enterprises to increase profit margins; to some extent, make up for the loss caused by the decline in the price of cotton, and play a role in income support; due to the market competition factors introduced by this reform will help to form the forced mechanism, and promote the improvement of cotton quality; the reform can achieve the goal of straightening out the cotton price formation mechanism. From the point of view of the negative aspects, target price subsidy policy goal is not clear enough, policy makers hope to stimulate production ensure farmers income at the same time;farmers income subsidies are generally lower than expected.Relevant policy recommendations mainly include: First, our country should adhere to the "price supplement separation principle, gradually withdraw from the minimum purchase price and a temporary policy for purchasing and stockpiling," safety net "to guarantee the construction of grain and other major agricultural products. Secondly, the government should gradually improve the market regulation mechanism to avoid the price of direct intervention of discretion, to accelerate the formation of a stable and clear regulatory policy rules of agricultural products market. Third, further reducing the "yellow box policy" support, strengthen the use of "green box policy" tool. Fourth, the proposed co-ordination of international and domestic two markets, strengthen the multilateral and bilateral trade partnership to build agricultural products, promote the formation of international trade policy coordination mechanism. Fifth, the government should be careful to promote the target price subsidy policy, and actively explore the target price insurance system, increase the central government subsidies for the target price insurance premium. Finally, in the long run, China should accelerate the establishment of a sound legal basis and theoretical system of agricultural product market regulation and control policy, improve the effectiveness and scientific of policy.