Abstract
In recent years, food security, especially supply, has been an important issue in China’s agricultural production. The stability of grain prices is related to the stability and development of the grain market. Based on agricultural production data from 1970 to 2015, this paper explores the influence of agricultural product price fluctuation on grain production by using the cobweb theory and vector error correction (VEC) model. The results show that changes in grain production in China are affected by fluctuations in agricultural product prices, that the production change lags behind the price change, and that there is a long-term equilibrium relationship between grain yield and agricultural product price. A Granger causality test shows that the change in agricultural product price is the Granger cause of grain yield change.
Highlights
The most important problem in Chinese agriculture is the well-being of farmers, and farmers’ most important protection comes from food production
These researchers use the supply reaction model to study the relationship between grain prices and yield, and some research is based on the price of a single grain variety, but there is a lack of empirical research on agricultural prices for food production
Based on the vector error correction (VEC) model, this paper examines the relationship between agricultural product price fluctuation, grain yield and sown area
Summary
The most important problem in Chinese agriculture is the well-being of farmers, and farmers’ most important protection comes from food production. Luo using the Nerlove model of China’s food supply response to conduct an empirical analysis, showed that China’s grain supply elasticity is not high in the short- or long-term, indicating that China’s grain production is difficult to change quickly according to the sown area [27]. Through the review of these documents, we can find that most scholars use the supply and demand point of view to research food production problems These researchers use the supply reaction model to study the relationship between grain prices and yield, and some research is based on the price of a single grain variety, but there is a lack of empirical research on agricultural prices for food production. If the prices of agricultural products continue to fall, the farmers will choose other crops with a high economic value, and this will affect the supply of grain production in China.
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