Ministry of Agriculture: It is normal for agricultural product prices to increase by 10% every year

Since the National Day last year, due to the high CPI, inflation expectations have increased significantly, and the National Development and Reform Commission and other departments have jointly put pressure on agricultural product prices and prompted agricultural product prices to return. In response to sensitive agricultural product prices, Qian Keming, member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference and the Director of the Department of Market and Economic Information of the Ministry of Agriculture, said recently that according to the estimates of the Ministry of Agriculture, it is normal for agricultural product prices to rise by 10% each year.

The data released by the Ministry of Commerce yesterday (25th) showed that last week (January 17-23) the Ministry of Commerce focused monitoring of edible agricultural products [15.92 3.04%] and prices of production materials continued to rise. The average wholesale price of 18 kinds of vegetables rose by 12.6%, which was an increase of 6.5 percentage points from the previous week. It is worth noting that this is the price of agricultural products that has kept rising for five consecutive weeks. It is also worth noting that some analysts have said that rising food prices have begun to pass to the non-food sector.

Forecasts from a number of brokerage firms indicate that CPI will remain high in the first quarter of 2011. Affected by the weather and holidays, CPI may exceed 5% again in January.

However, Qian Keming believes that due to the limitation of the price formation mechanism for agricultural products, the overall level of China's agricultural product prices has been low for a long time. It cannot truly reflect the scarcity of resources such as arable land and fresh water, far below the Japan with similar per capita agricultural resource endowments. With South Korea, this has led to a decline in the efficiency of agricultural production. It has been difficult for farmers to increase income and the quality of agricultural products has also been difficult to guarantee. Even if the increase in agricultural product prices was relatively large last year, labor costs, production materials, transportation costs, and other costs have increased significantly, and agricultural products must have reasonable room for price increases in order to offset rising production costs and protect the enthusiasm of farmers. According to estimates of the Ministry of Agriculture, it is normal for agricultural products prices to increase by 10% each year.

Qian Keming stated that in the coming long period of time, domestic and international prices of agricultural products will show a rigid upward trend. We must gradually adapt to this trend, that is to say, as consumers, we must gradually adapt to the price of food. Rising, and as the government, must formulate corresponding policies to offset the impact of rising food prices on low-income groups.