Study On Impact Factor Of Grain Price In China

The fluctuations on grain price will cause uncertainty to grain production, theimport and export of grain products and macro economic control. Based on sum up tothe pioneers’ study, we can find that there are different kinds of impact factors to grainprice. The same factor may have different influence to grain price at different marketbackground. Studying the impact factor of grain price is helpful to understand theregulation of grain price fluctuations, provide reference to make agricultural policies,ease its negative influence to farmers’ revenue, the basic life security oflow-income-people in city and the national food safety. Studying the macro economybackground and regulation in different periods would provide a new perspective toresearch the relationship between grain supply and demand, the grain circulationmanagement system and reformation of grain purchase. Relevant studying conclusionwill be good reference to understand correctly grain security under the condition ofmarket economy.First of all, under the guidance of economic law formed the price, the impactsfactors can be analyzed from the supply, demand and the others in summary ofexisting research. The factors in demand conclude life demand, production needs,trade demand and speculative demand. The influence factors of supply include grainpolicy, natural disasters, technology improving and trade factors etc. In addition, theexpectations and the external impact have an important influence on fluctuations inthe food price. Combined with the actual condition of China, this paper reported thatthe demand, cost, farmers’ rational expectation, supply and domestic macro economicoperation environment are five main factors to fluctuations in the food price.Respectively, the index system is consisted of food prices sub-index, consumer priceindex, production price index, the growth rate of food production and per capitaconsumption expenditure of urban resident’s rate in the actual conditions of china.Secondly, based on data about25provinces from1995to2010, this paperreports the similarities and differences of influence mechanisms among factors offluctuations in food prices before and after the food purchasing-selling marketizationin2001and the whole period. After the determination of GMM (DifferenceGMM/System GMM) by correlation test of disturbance and Sargan test, it will bebetter to build model by two periods than by whole time. Requirements and the quantity have always been important impacts on food price by dynamic panel model.That the former have a negative influence on grain price is consistent with theoreticalanalysis; that the latter have a positive influence on it is inconsistent with theoreticalanalysis. However, inflation, cost and the anticipated price of farmer have obviouslydifferent performance in this two time interval. Inflation and the anticipated price offarmer have an opposite completely effect on grain price in this two periods. With thehigher the degree of market, the continuous improvement of people’s level ofknowledge and production technology mastery, the influence of this two variables tograin price will be same with theoretical analysis. While, with more advancedmodernization of agricultural production, due to the existence of the production scale,production costs for the impact of food price fluctuations will be gradually weakened.Lastly, based on the difference between the empirical results with theoreticalanalysis, a number of policies are recommended from the respective of variousvariables to China’s grain market reformation. At the same time, there are somedeficiencies in this article noted in the last part.