The Formation And Variation Of China’s Agricultural Price Ratio

Agricultural price ratio is ratio of two associated agricultural price, and reflects changes of relative earning. Analyze theoretically formation mechanism of agricultural price ratio, grasp variance law of agricultural price ratio, discern factors that influence agricultural price ratio variance, and investigate the effect for the agricultural production structure. Research has important practical significance for Government to formulate policies that guide the allocation of resources, improve the efficiency of resource allocation, and promote the growth of farmers’income levels. In order to analyze the formation mechanism of and law of agricultural price ratio, the article includes the following five aspects:Firstly, analyze the theoretical and mathematical models of the formation of agricultural price ratio. Divide agricultural price ratio into resource competition price ratio and input-output price ratio, and reveal the mechanism of the formation of price ratio partial equilibrium theory with partial equilibrium theory in supply and demand markets of two agricultural products. Using the utility function and the production function, analyze factors that affect agricultural price ratio decision with the objective of consumer utility maximization.Secondly, choose the form of agricultural price ratio, analyze the linkage between agricultural products, and measure agricultural price ratio. The section describes the form of agricultural price ratio, choose representative agricultural price ratio, and measure agricultural price ratio. Then, analyze agricultural products market integration and price transmission. Choose ultimately four kinds of price ratio relations, i.e., soybeans to corn, wheat to corn, cotton to wheat and hog to corn. There exists a balanced relationship between pairs of agricultural price among four kinds of price ratio relations, smoother price transmission and higher market efficiency.Thirdly, analyze the variance law of agricultural price ratio from three aspects. On agricultural price ratio, analyze the general characteristics with statistical analysis, and judge trend, periodicity and fluctuation with HP filtering method. The results show that On volatility, hog-corn price ratio’s is strongest, followed by cotton-wheat price ratio, soybean-corn price ratio, wheat-corn price ratio; in terms of trends, wheat-corn price ratio showed a gradual downward trend since the reform and opening up, and prior to1994-1995, they have a lower mean on soybean-corn price ratio, hog-corn price ratio, and soybean-corn price ratio, after which have a higher mean.Fourthly, from an empirical perspective, analyze causes of variance on agricultural price ratio. Test correctness of mathematical models on the decision of the agricultural price ratio with panel data model. For example to soybean-corn price ratio and hog-corn price ratio, analyze factors that influence resource competitive price ratio and input-output price ratio. The results show the factors affecting soybean-corn price ratio include corn-soybean relative labor productivity, changes of the relative size, ratio of the amounts of labor, agricultural policies and international soybean-corn price ratio. Respectively, there was a significant positive correlation between china’s and international soybean-corn price ratio. The factors affecting hog-corn price ratio include hog-corn relative labor productivity, ratio of the amounts of labor, and inflation rate. Fifthly, analyzes the causes Heilongjiang Province’ changes of agricultural planting structure in recent years to produce with field research datum. As an typical example, explores influence of soybean-corn price ratio to famers plating decision-making behavior. The results showed that, when making production decisions for the allocation of resources, variance of soybean-corn price ratio has a significant positive effect on farmers planting structure adjustment, and soybean price and corn price has less significant role for reallocation of resources.Finally, the paper summarizes the proposed measures and the corresponding ideas for further research.