Following the “garlic you,†“Ginger, your army,†“beans, you play,†this year's scallion prices soared and was dubbed the “onion hit wave,†causing concern again. Therefore, it is necessary to understand the law of price oscillations of agricultural products (10.76, -0.15, -1.37%).
As far as agricultural products markets are concerned, their prices are governed by two laws: The first is the effect of the law of supply and demand. The price of agricultural products reflects the changes in the supply and demand of agricultural products. When the supply of agricultural products exceeds supply, the price of agricultural products rises. On the contrary, the supply exceeds demand, and the price falls. This is the general law of supply and demand. However, due to the fact that agricultural products have the characteristics of less demand elasticity, they cannot be effectively reduced as the price rises. As a result, small fluctuations in supply and demand at the balance point between supply and demand can cause large fluctuations in the prices of agricultural products. The second is the effect of the law of agricultural production. The most prominent feature of agricultural production is its seasonality and periodicity. When the price of agricultural products rises, even if producers want to increase supply, it will not be realized for a while because of the seasonal and cyclical constraints of agricultural production. With the expansion of production by farmers, it is very easy to cause excess supply, leading to a sharp drop in prices. Some people figuratively compared peasant farming to land as "gambling." The cyclical nature of agricultural production determines that it is difficult for agricultural products to respond to market conditions in a timely manner. This is a normal phenomenon in the process of supply and demand for agricultural products (especially small fresh produce). In the small-scale peasant economy, this phenomenon is often characterized by excess, and the market’s “price stability†is based on the “unsatisfactory sales†of a large number of smallholder agricultural products. A large number of small producers, diversified planting, mainly rely on their own consumption, supplemented by market sales, and the unsustainability of agricultural products does not affect their enthusiasm for continued production in the coming year. However, with the massive transfer of rural labor and changes in rural lifestyles, scattered and diversified cultivation has become less and less, and farmers’ reliance on the market has become stronger and stronger. Accordingly, the regulatory role of the market has become weaker and weaker. In recent years, there have been a number of important reasons for the price fluctuations of small agricultural products.
How to solve the shock problem of small agricultural product prices? There are roughly three aspects that people propose: The first is to encourage large-scale operation of industrial and commercial capital. This is not an effective measure to solve the problem. In fact, the reason why the price fluctuations of small agricultural products is related to the large number of decentralized plantations. Large-scale operations are not only large in investment, but also in risk. In the face of natural risks, market risks are also difficult to avoid. Coupled with the profitability and speculative nature of capital, it is difficult for scale operators to become stable agricultural production entities. The second is to overcome the problem of agricultural product price shocks by strengthening agricultural information construction. The premise of this claim is that the price shock of agricultural products stems from the lack of information channels for farmers, causing farmers to blindly follow the trend. In fact, the response of agriculture to market information is "inevitable". It is inevitable that no matter how advanced information systems are used to adjust the structure of farmer households, it will be difficult to play a role. The reason is simple. Agricultural production is seasonal and cyclical, and farmers have not adjusted the time and space for planting content based on information. The third is to crack down on hot money speculation. Those who hold this view believe that the price increase of agricultural products such as scallions is mainly due to speculation by a small number of dealers hoarding supplies, short-term investment speculation by hot money. There is nothing wrong with the low-achieving businessmen and the pursuit of profit maximization. Moreover, the risk of agricultural products such as hoarding onions is also very high. It is difficult to define the speculation behavior, and the crackdown is not a solution to the fundamental issue. Less supply may be used for hype. Therefore, we must work hard in the supply chain.
Treating small fresh produce such as welsh onion cannot use the macro-control measures such as the purchase of the city in order to establish a national reserve pool to suppress prices. Not all agricultural products are products related to the national economy and the people's livelihood. The price of green onions, which has always been used as a cooking ingredient, will not affect the lives of ordinary people, let alone raise the danger of pushing up the CPI. From the consumer's point of view, especially for low-income consumers, it can be circumvented by purchasing substitutes within a certain range, or they can store some green onions at home in the winter just like living a few decades ago. Seasonal agricultural products such as green onions, the shortage is often temporary, and soon there are "small green onions," "Corn onions," and other listed alternatives. A professional cooperative that builds small agricultural products can not only protect the interests of farmers, but also stabilize market supply through measures such as stabilizing production scale, storage, and reducing circulation costs. It is the only way to solve small agricultural products such as green onions.
As far as agricultural products markets are concerned, their prices are governed by two laws: The first is the effect of the law of supply and demand. The price of agricultural products reflects the changes in the supply and demand of agricultural products. When the supply of agricultural products exceeds supply, the price of agricultural products rises. On the contrary, the supply exceeds demand, and the price falls. This is the general law of supply and demand. However, due to the fact that agricultural products have the characteristics of less demand elasticity, they cannot be effectively reduced as the price rises. As a result, small fluctuations in supply and demand at the balance point between supply and demand can cause large fluctuations in the prices of agricultural products. The second is the effect of the law of agricultural production. The most prominent feature of agricultural production is its seasonality and periodicity. When the price of agricultural products rises, even if producers want to increase supply, it will not be realized for a while because of the seasonal and cyclical constraints of agricultural production. With the expansion of production by farmers, it is very easy to cause excess supply, leading to a sharp drop in prices. Some people figuratively compared peasant farming to land as "gambling." The cyclical nature of agricultural production determines that it is difficult for agricultural products to respond to market conditions in a timely manner. This is a normal phenomenon in the process of supply and demand for agricultural products (especially small fresh produce). In the small-scale peasant economy, this phenomenon is often characterized by excess, and the market’s “price stability†is based on the “unsatisfactory sales†of a large number of smallholder agricultural products. A large number of small producers, diversified planting, mainly rely on their own consumption, supplemented by market sales, and the unsustainability of agricultural products does not affect their enthusiasm for continued production in the coming year. However, with the massive transfer of rural labor and changes in rural lifestyles, scattered and diversified cultivation has become less and less, and farmers’ reliance on the market has become stronger and stronger. Accordingly, the regulatory role of the market has become weaker and weaker. In recent years, there have been a number of important reasons for the price fluctuations of small agricultural products.
How to solve the shock problem of small agricultural product prices? There are roughly three aspects that people propose: The first is to encourage large-scale operation of industrial and commercial capital. This is not an effective measure to solve the problem. In fact, the reason why the price fluctuations of small agricultural products is related to the large number of decentralized plantations. Large-scale operations are not only large in investment, but also in risk. In the face of natural risks, market risks are also difficult to avoid. Coupled with the profitability and speculative nature of capital, it is difficult for scale operators to become stable agricultural production entities. The second is to overcome the problem of agricultural product price shocks by strengthening agricultural information construction. The premise of this claim is that the price shock of agricultural products stems from the lack of information channels for farmers, causing farmers to blindly follow the trend. In fact, the response of agriculture to market information is "inevitable". It is inevitable that no matter how advanced information systems are used to adjust the structure of farmer households, it will be difficult to play a role. The reason is simple. Agricultural production is seasonal and cyclical, and farmers have not adjusted the time and space for planting content based on information. The third is to crack down on hot money speculation. Those who hold this view believe that the price increase of agricultural products such as scallions is mainly due to speculation by a small number of dealers hoarding supplies, short-term investment speculation by hot money. There is nothing wrong with the low-achieving businessmen and the pursuit of profit maximization. Moreover, the risk of agricultural products such as hoarding onions is also very high. It is difficult to define the speculation behavior, and the crackdown is not a solution to the fundamental issue. Less supply may be used for hype. Therefore, we must work hard in the supply chain.
Treating small fresh produce such as welsh onion cannot use the macro-control measures such as the purchase of the city in order to establish a national reserve pool to suppress prices. Not all agricultural products are products related to the national economy and the people's livelihood. The price of green onions, which has always been used as a cooking ingredient, will not affect the lives of ordinary people, let alone raise the danger of pushing up the CPI. From the consumer's point of view, especially for low-income consumers, it can be circumvented by purchasing substitutes within a certain range, or they can store some green onions at home in the winter just like living a few decades ago. Seasonal agricultural products such as green onions, the shortage is often temporary, and soon there are "small green onions," "Corn onions," and other listed alternatives. A professional cooperative that builds small agricultural products can not only protect the interests of farmers, but also stabilize market supply through measures such as stabilizing production scale, storage, and reducing circulation costs. It is the only way to solve small agricultural products such as green onions.
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