Although this year China sees a good harvest, the slumping grain prices might cause the farmer's income to drop drastically.

Anbound’s research team is of the view that the slumping grain price is hitting the market.

Although there are certain coincidental factors such as the low international grain price coupled with the overstock, the negative impacts arising from institutional reasons such as the acquisition price of the grains and the subsidies policy should not be overlooked.

Grain prices should be the centre of the mechanism and China needs to be more vigilant, systematic and standing firm on the reform. The fiscal subsidies should be used a complementary mean to realize the healthy operation and normal development in the grain market.