Research On Effect Factors And Government Regulation Of Agricultural Product Price Fluctuation

Agricultural products are not only the most important necessities of the people’s lives, but also the crucial industrial raw materials for economic development. The prices of agricultural products are the key economic variables for agricultural development and even the national economy conduction. Fluctuations of agricultural products prices not only affect the quality of people’s lives, but also affect the vital interests of the farmers. Therefore, the study of the fluctuations in prices of agricultural products has important theoretical significance.In recent years, prices of agricultural products in the worldwide, especially grain prices showed a rising trend. Since2006, grain prices as well as the price of pork, edible oil, and vegetables have been rising. International financial crisis began in2008, agricultural prices appear sharp decline. Prices of agricultural products gradually had gone flat until the first half of2009. However, the prices of agricultural products had entered a new round of volatility cycle from the second half of2009. Current round of agricultural prices was the overall rising trend, not only the grain crops but also agro-food prices are soaring; Raising prices not only involve the commodity, also careen agricultural. Based on this background, the research on the characteristics of fluctuations in prices of agricultural products in China, and the effect factors of price fluctuations has important practical significance.This thesis is to answer three questions:the first question is how fluctuations in the prices of agricultural products in China; the second question is what are the main effect factors of the fluctuations in the prices of agricultural products; What is the impact degree of these factors on the fluctuations in the prices of agricultural products; the third question is how government stabilize the prices of agricultural products. Firstly, research on fluctuations characteristics of agricultural products prices shows that fluctuations cycles speed up and frequency. Fluctuations of agricultural products prices are raised by price fluctuations of the pigs, cotton, soybeans, rice and other major agricultural. Moreover, Soybeans, pigs and rice price volatility have a significant gathering, and fluctuations in the increasingly weakened, but rice price volatility has a significant asymmetry. Secondly, in order to better analysis of effect factors on agricultural prices fluctuations, the paper applies specification analysis and empirical analysis methods to research. Primarily, theoretical analysis of the formation mechanism of the prices of agricultural products, it shows that the price fluctuations of agricultural production, the supply price elasticity of farmers and marketing enterprises, the retail price elasticity of marketing businesses and consumers, as well as the alternative elasticity between marketing products and agricultural products and other factors are influencing factors on the prices of agricultural products. On the basis of theoretical analysis, the paper conducts the empirical analysis from two perspectives. One is from the agricultural industry chain perspective to study the relationship and impact among the prices of agricultural products. The study found that demand-pull effect strength is stronger than supply-driven effect in vertical price transfer process, and former lasts much longer. For wholesale price of agricultural products, it mainly impacted by prices of its own and production materials; for food retail price, it is impacted by upstream supply price significantly in a relatively short time. Meanwhile, the market association degree in agricultural industrial chain can also affect the vertical pass effect of the agricultural products prices. The compact vertical market links, such as the market of meat products and soy products market of "property rights comprehensive integration", its price transmission has asymmetric price transmission characteristics. The product chain of rice and cotton products chain does not have the asymmetric price transmission characteristics. On the other hand, from the horizontal market supply and demand point of view, empirical research founds that the main factors affecting the supply of agricultural products are the cost of agricultural products, financial investment, as well as the current prices of agricultural products. Affecting agricultural demand is more complex, it includes population, food exports retail prices, money supply, and the RMB exchange rate etc. In the market equilibrium conditions, the prices of agricultural products is not significantly influenced by the current supply and demand, but mainly influenced by the impact of previous supply and first two demands. In addition, the paper also verifies the divergent cobweb type of agricultural products market in China. Finally, on the basis of the above study, the paper puts forward a theoretical framework and target for the regulation of agricultural products prices fluctuation in China. Government should be conducted by regulation strategy to manage agricultural product market supply and demand management, and to construct agricultural market mechanisms so as to further improve the price regulation policy system of agricultural products.