Price increase has not helped farmers
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The increase in the prices of agricultural products this year is one of the greatest concerns of the people and the government now. Relevant ministries have announced a series of policies to prevent the prices from rising further. Rising housing prices are still a big concern for the people, but since farm products are daily necessities, the increase in their prices has made life very difficult for them.
Nevertheless, people seem to avoid questions related to their livelihood because they think an increase in the prices of farm products will help farmers, which is a sensitive issue. During the days of planned economy, the loss of farmers' interests because of the demarcation between urban and rural areas had had a great impact on people. Later, one of the real aims of market economy was to eliminate the problem by making primary industries subsidize other industries and pay the farmers their due.
That's why people believe the increase in prices of farm products is one of the results of marketization that has benefited farmers. But have higher prices of farm products really benefited the farmers?
Take the increase in vegetable prices in the first half of this year for example. Though natural disasters such as droughts and spring frost did not cause the prices of farm products in the largest wholesale markets to increase drastically - in fact, prices of some products did not increase at all - vegetables have become dearer by as much as 20 percent compared to that of last year. This means only a small part (or even none) of the extra money that urban residents have paid to buy farm products has been transferred to the farmers. The extra cost actually has gone to middlemen.
This has given rise to two questions: Does marketization aim to transfer the extra profits earned from consumers to middlemen? Can the extra profit made by middlemen indirectly help the overall economy?
The answer to the first question is obviously "no". In fact, it contradicts the original intention. When money from urban consumers is transferred to the wrong group, intervention in the market can produce opposite result.
