The low price of fertilizers is not a matter of course

The Statistics Bureau of Shaanxi Province recently released the results of the survey on the implementation of the Outline of the Seven Major Projects for Increasing Farmers' Income. It was pointed out that in the implementation of the “seven projects for increasing farmers’ income” and the implementation of the national policy of supporting agriculture and benefiting agriculture in recent years, there are five major rural people in Shaanxi. One of the hopes is that we hope to reduce fertilizer prices.
The report said that according to a survey of 10,460 households in the province, 46.6% of the farmers reported that the current price of agricultural production materials such as fertilizers is too high for farmers to bear. Although the national and all levels of governments have continuously increased their support for grain and other planting subsidies, to a certain extent, the cost of planting grain has declined. However, in recent years, prices of agricultural production materials such as chemical fertilizers have continued to rise, which in turn has reduced the country’s cultivation of farmers. Subsidies, especially grain cultivation, still have little or no profit. The peasants fervently hope that the country can strictly control the increase in prices of agricultural production materials such as fertilizers.

Practically speaking, fertilizer prices are indeed low. Take urea as an example, the current ex-factory price of around 1,550 to 1,650 yuan (t price, the same below) and the retail price of 1,600 to 1,900 yuan is only equivalent to the 2004 price level. Looking at the overall price level, the price index is now rising every year. Every year, the country strives to control the rise of the price index within 3%, and has made unremitting efforts to this end. However, in fact, the price index is difficult to control within 3%, according to 3%, 6 years is 18%, equivalent to the overall price level rose by 18%, while the fertilizer price has not risen, but also that the current fertilizer prices Is it high? Let's look at the items in our daily life. In addition to televisions, computers, and other electronic products, because of technological advancement, prices have continued to fall. How many things can current prices compare with 2004 levels? There are a few things that are not rising prices?

Fertilizer is a kind of high energy consumption and high resource consumption product. From the perspective of cost, the current price of fertilizer is not too high, but it is too low. Let's take a look at the coal price that has the greatest impact on the cost of fertilizer production. In 2004, the mining price of Datong Coal in Shanxi Province was 160 yuan. The final price of coal transportation to Shanghai was about 500 yuan, and the average price of Liaoning fuel coal was 350 yuan. Now, basically, the price has turned over. Two or three times. The price of Hunan small coal pulverized coal to the fertilizer plant in 2004 was around 250 yuan, and it is now nearly 700 yuan. Let’s look at the price of electricity. In 2004, the price of electricity for chemical fertilizers in Hunan was around 0.25 yuan per kilowatt-hour. Although the country has been implementing preferential policies for the use of chemical fertilizers in recent years, the actual increase is not small. At present, it has reached about 0.35 yuan per kilowatt-hour. The increase reached 40%. At present, the price of chemical fertilizers in Hunan is relatively low in the country, and the price of chemical fertilizers in some provinces is already close to 0.5 yuan.

Seeing this group of data, I asked myself, can I say that the current price of fertilizer is high? If it is hard to say that fertilizer prices are high, fertilizer companies can only say that they are "dumb eating Coptis, and they have no way of saying it."

In the eyes of some people, they think that fertilizer prices should be taken for granted and that this can protect the interests of farmers. This is not the case. On January 24 last year, the National Development and Reform Commission and the Ministry of Finance jointly issued the "Circular on Reforming the Mechanism of Price Formation of Chemical Fertilizers," and formally announced the cancellation of the implementation of chemical fertilizer price control for many years. Since January 25, the factory price of chemical fertilizers has been under the guidance of the government. The price is changed to "market adjustment price." In other words, starting from January 25, the management of fertilizer prices has undergone major changes.

The price of chemical fertilizers in the past was controlled by the state, and the factory price limit and the maximum retail price limit were imposed. Now, chemical fertilizer products are exactly the same as other products, and they are formed through market competition, and the country is no longer specific to fertilizer prices. High and low, prices rise and fall, high and low, are normal. However, the state has promised that if the price of agricultural resources rises, the state will increase the subsidies to farmers, allowing the country to assume the increase in the price of agricultural resources and prevent farmers from losing money.
This is very beneficial to farmers. It is much better than the price control methods that would have sought to limit the price of death, but in fact it has not been allowed to die. Ultimately, the farmers suffer a loss. This way, the actual benefits for the farmers are much greater.

If purely from the perspective of protecting the interests of farmers, the price of chemical fertilizers is naturally as low as possible, but this is only an appearance. If the price is too low, most fertilizer companies are in a state of loss, unable to produce normally, and the output has fallen sharply. At that time, not only the price of chemical fertilizers is high, but also high prices may not be available for purchase. Therefore, regardless of the actual situation, it is not a good idea to keep down the prices of chemical fertilizers. At the same time, taking into account the interests of farmers and the interests of manufacturers is the best way to achieve harmonious development.