Interest of Farmers Protected

CHINA - Liu Shinan writes that last weekend, media reported that pork prices had continued downwards for 10 days, falling to as low as less than 10 yuan ($1.54) per kg.
calendar icon 15 October 2008
clock icon 3 minute read

Mr. Shinan writes in China Daily that the news shocked him somewhat, for pork price hike was not a too distant memory for him. He searched online information about the market and found that the prices had remained high for over a year.

Pork prices began to rise in May last year and the average price once reached 21 yuan per kg while a certain kind of pork product peaked at 28 yuan. The price stayed at around 20 yuan until August this year when it began to fall.

Like any other urban consumer of farm produce, Mr Shinan certainly rejoice over the price dive. However, he worries a little about pig farmers, especially those individual raisers in the countryside. They began to raise more pigs last year when the short supply triggered the price hike of pork. And it was exactly because of their cutting down on pig-raising in the previous year that led to the short supply last year. Now it is the time for them to reap the returns for their last year's investment but the prices fell.

Price hikes trigger increases in pig-raising; more pigs cause the price to descend, which leads to reduction in pig-raising, which in turn pushes up the prices. The cycles continue endlessly. Economists tell us that this is the market rule.

As a layman about economics, he says he certainly would not challenge this theory. But one cannot help but wonder if it is really justifiable and who are to blame for the losses the individual farmers have suffered?

Pig-raisers are not the sole victims of such drastic price fluctuations. It was reported yesterday that farmers in Guizhou Province had a bumper harvest of tomato this year but the wholesale price was only 0.30 yuan ($0.05) per kg. The retail price was 3.60 yuan in Beijing yesterday.

In the whole production-marketing chain from farming to consumption, farmers always bear the brunt whenever a disaster, whether natural or artificial, occurs during the procedure. They are the most vulnerable to risks but the least powerful when it comes to profit-sharing.

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