Appropriate increase in grain prices helps safeguard domestic food supply

In the past two years, the prices of domestic agricultural products have risen rapidly. In particular, since the beginning of this year, the domestic main grain prices have reached record highs. The rapid soaring of food prices has aroused concern from all parties. Discussions on domestic food security have also begun to increase. The author believes that there is an inevitable trend in the rise of food prices, and low food prices do not mean “food security”. Allowing a modest rise in food is of great significance to improving the enthusiasm of farmers for grain production and ensuring food supply.

Looking at the recent rise in food prices for many reasons, the global population expansion, the shrinkage of arable land, the frequent occurrence of natural disasters and other factors have contributed to the continuous rise in international grain prices. Speculative forces have also played a role in fueling the development of grain. "Continuous crisis." As for the rise of domestic food prices, it is closely related to the conduction of international grain prices in recent years and the support of sustained strong domestic demand. In addition, in order to cope with the economic crisis, the international implementation of a sustained and loose monetary policy has led to a high level of domestic inflation and has also pushed up the price range of agricultural products.

In the long run, rising food prices are inevitable. On the one hand, the cost of agricultural production continues to increase, and the value of agricultural products also increases. On the other hand, with the gradual increase in the conversion of foodstuffs to meat and industrial consumption, the market's demand for food has continued to increase. Under this situation, the long-term supply and demand pattern of agricultural products tends to be tight, and the relationship between supply and demand determines that food prices have long-term growth potential. Based on this, when the increase in food demand exceeds the growth rate of grain supply, it will inevitably lead to soaring food prices, and the gradual rise in grain prices in the future may become the norm.

At the same time, the author believes that the essence of food security is the rise in non-food prices, and its root cause is insufficient supply. The fundamental solution to "food security" is to ensure domestic food supply. Based on this, in order to ensure food supply, under the premise of maintaining a certain level of arable land, it will be very important to increase the enthusiasm of farmers for growing grain.

At present, the rural population in China is still huge, and farmers have huge consumption potential and consumer demand. However, compared with cities, the income level of farmers is at a significant disadvantage, and most of the sources of income for farmers are mainly from food income. Previously, due to the fact that domestic food prices have remained low for a long period of time, incidents involving “grains, crops, and farmers” have appeared from time to time, which has greatly hit farmers’ enthusiasm for growing grain, and in some areas even cultivated land has been abandoned. If things go on like this, then the domestic food shortage will inevitably be highlighted. The moderate increase in food prices will help increase farmers' enthusiasm for grain production, help to develop domestic land efficiency, increase food supply, and ensure domestic food security.

In addition, from the perspective of the current national policy, the state’s emphasis on agriculture has been placed first. The state introduced the reduction of agricultural tax, raised the minimum purchase price, and the policy objective of supporting the city's collection and storage is to increase grain prices and increase farmers' income. It can be seen that the state’s investment in rural areas has continuously increased, and the support for agriculture has been increasing. A series of policies show that the country is working hard to solve, the farmers’ income is low, and the enthusiasm for growing grain is low. Under this premise, the food price rose moderately. In line with the policy trend, it is also conducive to the current domestic situation. How to prevent food prices from soaring and plunging, crack down on speculation, formulate relevant policies, continue to increase farmers’ enthusiasm for growing grain, and allow farmers to truly benefit from rising food prices are the most important.