The Performance,Causes And Countermeasures Of Agricultual Products Financialization

The article analyses the phenomenon of agricultural products financialization in the Chinese economy. The process that ordinary agricultural products transform to commodity investment is called agricultural products financialization. Traditionally,the phenomenon of financialization mainly appeared in the capital goods,but with capital entering the trend of the financialization of agricultural products is becoming more and more obvious in recent years.By describing the typical fact of produce prices in recent years,the agricultural products made an intuitive show of agricultural products financialization.And we can find 3 points of note:(1) These products belong to the ordinary consumer goods,but in the case of supply and demand basically stable,real price changes is obviously deviated from the pricing mechanism of common consumer goods. The trend of agricultural financialization is proved in point.(2) All kinds of agricultural products price don't change similarly,but fluctuate alternately.Thus, lots of industry hotspots appear.(3)The price fluctuation rate is not same.Therefore,the financializationcan of agricultural products can be divided into two levels.There are advantages and disadvantages of agricultural products financialization.The advantages mainly include 3 points:(1) Be helpful to discover the reasonable price of agricultural products;(2) To inject amounts of money to the agricultural products market;(3) Make money supply time spatially flat. The disadvantages also include 3 points:(1) Affect residents' life,fuelling inflation expectations.(2) Distort the mechanism of agricultural prices and damage the interests of farmers;(3) Be away from the substantial economy and produce latent bubble. Though everything is a double-edged sword,the adverse impacts of agricultural products financialization are more than positive effects. Agricultural commodities price fluctuate without the supply and demand relations. It not only interfere with the production process,but also influence consumer link.So it leads to market confusion.There are two kinds of resaons why agricultural financialization appears.(1)The financial factors: excessive money supply, and the awakening of folk financial consciousness;(2) The non-financial factors: the development of agricultural industrial use,natural disasters trigger financial capital flowing to the agricultural market, and the asymmetry of agricultural market information. This paper argues thatfinancial factors are greater than the non-financial factors. Industrial use, natural disasters, and market information asymmetry are all just a shortfall in supply of agricultural products in some nodes.The deep reason is that there too much money in the whole economic system.The financialization of agricultural products is essentially a monetary phenomenon.This article mainly concluded 5 policy recommendations:(1) Implement prudent monetary policy, and moderate the volume of money;(2) Implement the relevant fiscal policy, and lead the capital back to the substantial economy;(3) Complete the agricultural products price support system, and draw lessons from foreign practices accordingly;(4)Strengthen agricultural information monitoring and publishing, and guide price expectations correctly;(5)Introduce more agricultural products futures contracts, and lead the direction of agricultural products financialization.