The Central Economic Work Conference emphasized the importance of keeping prices of key agricultural products, such as grain, at reasonable levels. According to the National Bureau of Statistics, China's total grain output in 2025 reached 1.4298 trillion jin, an increase of 16.8 billion jin compared to 2024. Against the backdrop of rising grain production, maintaining reasonable price levels for essential agricultural products remains a critical challenge.
A reasonable price level is not a fixed point but rather a range of fluctuations. If prices fall too low—failing to cover production costs or even making sales difficult—producers lose the incentive to continue production. Therefore, the lower limit of pricing should prevent long-term, severe losses that could cripple production. Conversely, excessively high prices would burden urban and rural consumers, affecting food expenditures and overall price stability. Thus, the upper limit must account for consumer affordability to avoid exacerbating living difficulties. Importantly, this "reasonable level" is subject to dynamic adjustments.
Since last year's Central Rural Work Conference, multiple high-level meetings and policy documents have reiterated the need to stabilize key agricultural product prices. While market mechanisms typically determine reasonable price levels, instances requiring regulatory intervention are not uncommon. A decade ago, price controls primarily targeted sharp increases. In recent years, however, regulatory focus has expanded from balancing supply-demand totals to addressing structural imbalances, shifting from curbing rapid price hikes to mitigating excessive declines.
From the second half of 2023, agricultural prices trended downward, with some products experiencing prolonged and steep declines. Authorities have strengthened market regulation for grain and other key commodities, implemented relief measures for beef and dairy sectors, and improved coordination between agricultural trade and production to stabilize markets.
Maintaining reasonable agricultural prices serves multiple objectives: 1. **Ensuring Supply Security**: As the world's largest agricultural importer, China must safeguard domestic production capacity through appropriate incentives. 2. **Protecting Farmer Livelihoods**: Farming income constitutes over 30% of rural households’ earnings (higher in main production areas), necessitating measures against price slumps that harm farmers. 3. **Consolidating Poverty Alleviation Gains**: Rural industries developed during poverty eradication efforts must not collapse due to sustained low prices, which could trigger relapses into poverty. 4. **Facilitating Agricultural Modernization**: Stable prices provide funding for technological and industrial upgrades.
Balancing producer and consumer interests doesn’t require zero-sum tradeoffs. Complementary tools—such as futures, insurance-based risk management (e.g., "insurance + futures" models), targeted subsidies for fertilizers/seeds, and infrastructure investments in storage and logistics—can stabilize farmer incomes while containing consumer costs. Clear policy guidance also helps producers anticipate market conditions.
China’s key agricultural products span grains, cotton, oilseeds, meat, eggs, dairy, fruits, vegetables, tea, and aquatic goods. Given diversified diets, regulators prioritize strategically vital categories: - **Primary Focus**: Grain and pork, given their massive consumption base and influence on overall price indices. - **Secondary Monitoring**: Vegetables (28 essential varieties) and other meats (chicken, beef, lamb), alongside fruits (e.g., apples, pears), dairy, and aquatic products.
Market interventions should be selective—responding to specific commodities, root causes, and trends—rather than reacting to every fluctuation. Additionally, rapid import growth for certain products necessitates coordinated production-reserve-trade strategies, real-time monitoring, and calibrated import controls to mitigate external price shocks.
Comments