In 2004, the state introduced the fertilizer price limit policy six times, but the fertilizer price still rose 15.8% year-on-year. In 2005, the price limit policy was more than last year. However, from the market reaction, the price of fertilizer still rose significantly. Along with the introduction of fertilizer price increase and price limit policies, the fertilizer market has continued to fluctuate. This has also caused the issue of fertilizer prices to receive more attention. In the competition between market behavior and policy leverage, the price limit policy has become more and more “unsatisfactory,†and the vast majority of production companies and farmers who are the main body of supply and demand for fertilizers have not obtained the expected benefits. Enterprises have complained and farmers have complained. So, who actually opened the "Pandora Box" of fertilizer?
In fact, this "Pandora Box" is a mixture of various contradictions. The fluctuations in the prices of fertilizers highlight various contradictions and gradually intensify. In the case of sharp increases in the prices of coal and other energy and raw materials, tight rail capacity, and rising freight rates for roads, how to take into account the interests of producers, operators, and farmers, and control the price of fertilizer at a reasonable level is in front of macro-control departments. The dilemma.
From the perspective of chemical fertilizer production and consumption, the crux of the failure of the fertilizer price limit policy is reflected in the following aspects:
First, the "departmental linkage" required for policy implementation is difficult to operate. Fertilizer is a commodity that has the special property of “grain foodâ€. The regulation of fertilizer prices involves departments of industry and commerce, commodity prices, finance, taxation, railways, supply and marketing, and electric power. The realization of a complete linkage process is a complex system project. The desired results can only be achieved on the basis of maintaining the smoothness of government decrees and unification of departmental operations. Judging from the actual situation, the state's major related regulation and control policies include preferential tariffs for fertilizer manufacturers, preferential tariffs for fertilizers for agriculture, return of value-added tax for urea products, special subsidies for diammonium phosphate, and guarantees for coal, electricity, and oil for fertilizer production. , gas supply, etc. However, no matter which department appears to be out of touch, which policy is not well implemented, it will affect the overall effect of policy control. In addition, there is little experience in adopting “branch linkages†on the issue of chemical fertilizers, and the understanding of the importance of chemical fertilizers varies from department to department. As a result, the actual implementation of the policy has received a lot of resistance and the effectiveness of implementation has been greatly reduced.
Second, "big market flexibility" is difficult to focus on control. China's chemical fertilizer market is also in a gradually improving market economic environment. In the past, the main channel of sales under the planned economic system has ceased to exist. In the past, the agricultural resources department was the main channel for sales of agricultural products, and the agricultural resources department could effectively control the market. At present, the restructuring of agricultural-funded enterprises has greatly weakened the role of the original main channel, and the supervision and regulation of government behavior has become widespread. As a result, operability has deteriorated, and the supervision and inspection of fertilizer prices has become more difficult.
Again, poor information has exacerbated the blindness of farmers' consumption. Farmers, as the main consumers, have inherent blindness in fertilization technology and are not very sensitive to changes in fertilizer prices. Many unscrupulous traders at the grassroots level use farmers to not understand the market information after policy intervention, deliberately rendering the atmosphere of shortage of chemical fertilizers and boosting Fertilizer prices.
Finally, local protectionism disrupts the optimal allocation of markets. On the one hand, the local protection of phosphorus and sulfur resources has exacerbated the strain on national resources. As the price of raw materials rises, the cost of fertilizer production increases, and the price of fertilizer increases. On the other hand, local governments have implemented the so-called access system explicitly or implicitly to some fertilizers, which has caused some monopoly in the fertilizer market, causing tensions in supply and demand in some regions.
In fact, the positive attitude of the government is not “finding nothingâ€, at least preventing unordered competition and accumulating many useful experiences in policy formulation. Therefore, if we can more clearly grasp the crux of the policy failure and adopt comprehensive measures to guide the market and treat the symptoms and the root cause, we can achieve the desired goals within a certain period of time. Of course, policies that really play a regulatory role ultimately need to play a role in the market, and completely liberalizing the market is the direction of macro-control. However, due to the special properties of chemical fertilizers, the government obviously can not completely liberalize the market as quickly as other commodities. Therefore, the government's fertilizer policy needs to find a way to adapt to the development of the fertilizer market, and can give full play to the macro-control role of policy, economic, and technical leverage.
In fact, this "Pandora Box" is a mixture of various contradictions. The fluctuations in the prices of fertilizers highlight various contradictions and gradually intensify. In the case of sharp increases in the prices of coal and other energy and raw materials, tight rail capacity, and rising freight rates for roads, how to take into account the interests of producers, operators, and farmers, and control the price of fertilizer at a reasonable level is in front of macro-control departments. The dilemma.
From the perspective of chemical fertilizer production and consumption, the crux of the failure of the fertilizer price limit policy is reflected in the following aspects:
First, the "departmental linkage" required for policy implementation is difficult to operate. Fertilizer is a commodity that has the special property of “grain foodâ€. The regulation of fertilizer prices involves departments of industry and commerce, commodity prices, finance, taxation, railways, supply and marketing, and electric power. The realization of a complete linkage process is a complex system project. The desired results can only be achieved on the basis of maintaining the smoothness of government decrees and unification of departmental operations. Judging from the actual situation, the state's major related regulation and control policies include preferential tariffs for fertilizer manufacturers, preferential tariffs for fertilizers for agriculture, return of value-added tax for urea products, special subsidies for diammonium phosphate, and guarantees for coal, electricity, and oil for fertilizer production. , gas supply, etc. However, no matter which department appears to be out of touch, which policy is not well implemented, it will affect the overall effect of policy control. In addition, there is little experience in adopting “branch linkages†on the issue of chemical fertilizers, and the understanding of the importance of chemical fertilizers varies from department to department. As a result, the actual implementation of the policy has received a lot of resistance and the effectiveness of implementation has been greatly reduced.
Second, "big market flexibility" is difficult to focus on control. China's chemical fertilizer market is also in a gradually improving market economic environment. In the past, the main channel of sales under the planned economic system has ceased to exist. In the past, the agricultural resources department was the main channel for sales of agricultural products, and the agricultural resources department could effectively control the market. At present, the restructuring of agricultural-funded enterprises has greatly weakened the role of the original main channel, and the supervision and regulation of government behavior has become widespread. As a result, operability has deteriorated, and the supervision and inspection of fertilizer prices has become more difficult.
Again, poor information has exacerbated the blindness of farmers' consumption. Farmers, as the main consumers, have inherent blindness in fertilization technology and are not very sensitive to changes in fertilizer prices. Many unscrupulous traders at the grassroots level use farmers to not understand the market information after policy intervention, deliberately rendering the atmosphere of shortage of chemical fertilizers and boosting Fertilizer prices.
Finally, local protectionism disrupts the optimal allocation of markets. On the one hand, the local protection of phosphorus and sulfur resources has exacerbated the strain on national resources. As the price of raw materials rises, the cost of fertilizer production increases, and the price of fertilizer increases. On the other hand, local governments have implemented the so-called access system explicitly or implicitly to some fertilizers, which has caused some monopoly in the fertilizer market, causing tensions in supply and demand in some regions.
In fact, the positive attitude of the government is not “finding nothingâ€, at least preventing unordered competition and accumulating many useful experiences in policy formulation. Therefore, if we can more clearly grasp the crux of the policy failure and adopt comprehensive measures to guide the market and treat the symptoms and the root cause, we can achieve the desired goals within a certain period of time. Of course, policies that really play a regulatory role ultimately need to play a role in the market, and completely liberalizing the market is the direction of macro-control. However, due to the special properties of chemical fertilizers, the government obviously can not completely liberalize the market as quickly as other commodities. Therefore, the government's fertilizer policy needs to find a way to adapt to the development of the fertilizer market, and can give full play to the macro-control role of policy, economic, and technical leverage.
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