Analyzing The Supply Factor Of Agricultural Products' Rising Prices-a CTC-based Perspective

In recent years, the domestic agricultural prices rose significantly, there are many factors that can affect changes in prices of agricultural products, and the cost of agricultural products is the dominant factor. The cost affects agricultural prices through a variety of channels, including direct and indirect effects. Input-output price model fully reflects the input-output relationship between the various industries, and it is the ideal model of the study of price impact. However, due to many factors, the degree of prices' transmission makes the result greatly different. This paper constructs a CTC(cost transmission capacity) input-output model by taking the profit rate and correlation characteristics of cost transmission into account.Based on the full analysis of prices and costs of Chinese agricultural products,we find that the cost of agricultural products is largely propelled the rise in agricultural prices. The results indicate: the CTC of agriculture department is at the medium level during 2007-2010. Comparing the CTC index and changes in margins reflects our model is rational. The exogenous shocks exert greater potential impact to agricultural price than the actual and direct impacts. To name a few, the influence of rising labor price is more significant, and the influence of rising land price is the second, that of rising oil price is the last. Farm products like plant fiber, wheat and vegetables are comparatively greatly affected by actual prices, and rice and oil-bearing crops suffered greater potential impact. Accordingly, we propose that our government must build the policy of the arget price of agricultural products, increase the agricultural subsidy standards, and promote agricultural modernization policy recommendations, and other policy recommendations.