From Grain Protective Price Policy To Grain Self-Sufficieny Policy

In this paper,the auther works over china's grain protective price policy and grain self-sufficiency policy based on theoretical analysis and empirical analysis,aiming to probing into the objectives of China's grain policy and it's realization of a more economically rational approach.It also tries to indicate meaningful guidance to direction of China's future grain and agricultural policy.This paper first analyzes the costs and benefits of grain protective price policy.In academia, the discussion about the benefits of grain protective price policy has focused mainly on three aspects:(1) To regulate the grain output fluctuations effectively; (2) To resolve the domestic food self-sufficiency and ensure national food security; (3) To increase farmers'incomes and promote a healthy and stable agriculture develoment. The paper will also carryies out a detailed analysis of each facet.In this paper, according to the different causes of fluctuation in grain production,it is divided into tow parts:rational volatility and stochastic volatility. Through analysing the four main grain output fluctuations of china since 1950, the paper argues that China's grain output fluctuations are mainly policy-based fluctuations, the random fluctuations caused by natural circumstances are relatively smaller.The analysis of the effect of the implementation of grain protective price policy in 1990s indicates that the grain protective price policy is not to temper but greatly increase grain production fluctuations. At the same time This paper presents a bold vision, perhaps the decision makers could consider the official grain reserves to be reduced to zero. The paper established a concise and elegant microeconomics model, by considering the influnence of the differences between the expected future price and the current price of grain upon the market participants,which proves that the profit-seeking behavior of speculators will realise the optimum allocation of the grain at different times.In short, the market mechanism can be effective substitute for grain protective price policy and grain reserves policy.On the grain protective price policy to ensure domestic grain self-sufficiency, this paper points out its logical inconsistency:on the one hand it doesn't believe that the market mechanism can be produced enough grain to meet the market demands,on the other hand It believes that increasing grain price can effectively add to grain production. While analysis of China's grain production capacity and of the food supply and demand of China since 1984 indicates that China's grain production capacity does not manifest serious problem, and grain protective price policy only created a large number of grain surplus once and once again.On the protection of grain protective price policy to protect the interests of farmers and agricultural development, this paper's analysis is also very different from the conventional view.In the second part, the paper analyzes the grain self-sufficiency policy. First,It re-examines and reflects on the core concept of grain or food security, and noted that the only reason of food insecurity, that is, individuals or families can not get access to adequate food,is poverty. Therefore,food security is not a food problem, but a development issue. Then it Explores the impacts of agricultural trade liberalization on developing countries and elicit the implications for China.The ultimate consideration of grain self-sufficiency policy is concerning about the political aspects.Through the establishment of a Sino-US game model on the issue of grain and a detailed analysis of the history of the grain embargo and its success or failure, this article drew some convictive conclusions: abandoning the grain self-sufficiency policy would not bring to China great political risk.Subsequent analysis showed that grain self-sufficiency policy exerted on domestic agricultural development more of a negative impact, while the objective of avoiding the impact of international grain price fluctuations on domestic food supply and demand itself is also questionable. This paper argues that speculation and fluctuation are not only the two basic characteristics of the market economy, but also two different paths for optimal allocation of resources, " fluctuations harmful theory" itself is a misreading of the market mechanism. At the same time, the detailed study of China's restrictions on grain export policy while facing soaring world food prices in 2008 shows that it deserves the objective and severe criticism. Finally,the paper reflects the problem of the attribute of grain in depth and notes that the core of the debate on properties with regard to food commodities is actually about whether the market mechanism can effectively solve the problem of grain supply and demand. On this basis, comparing to the experience of Japan and South Korea, the paper makes some pertinent recommendations on China's grain self-sufficiency policy.The basic logical framework of this paper is that the market mechanism has the potential to solve China's grain problem.It also points out that the marketization and internationalization of China's future agricultural policies is an inevitable trend, and this view is to be argued and supported in many ways.