In the harvest year, farmers' income actually decreased. The fundamental reason for this phenomenon is that agricultural products such as grain are often commodities that lack demand elasticity. The bumper harvest of grain has led to an increase in food supply. When the demand is basically unchanged, the grain equilibrium price drops, which is greater than the increase of the grain equilibrium quantity, resulting in the decrease of farmers' total income.

On the one hand, the government can buy grain by supporting prices and remembering the lowest price higher than the market equilibrium price; On the other hand, farmers' subsidies will limit the output of agricultural products and reduce market supply.

From the perspective of supply and demand: when the supply of a commodity exceeds demand, the price falls. When the grain output increases greatly, farmers have to compete to lower the price in order to sell their own grain, which means that the grain price often falls sharply when the grain is harvested. From the perspective of demand elasticity, because food is a necessity, food demand is not very sensitive to price changes, that is, demand is inelastic.

Even if the price of food is reduced, the demand for food will not increase greatly. Therefore, after the grain harvest, the increase of supply will lead to the decline of the equilibrium price, and the income increase brought by the price decline can not make up for the income loss brought by the price decline, which will eventually reduce the income of farmers and hurt their interests.

Extended data:

Demand elasticity includes:

① Price elasticity of demand. An index to measure the response degree of a commodity's demand to its own price change, calculated by dividing the percentage of demand change by the percentage of price change.

For example, if the price of a product goes up 1% and the sales volume goes down 1.5%, the elasticity of this product is 1.5. There are five kinds of elasticity of demand: greater than 1, less than 1, equal to 1, and equal to zero and infinity, respectively, indicating that the change of demand is greater than, less than, and equal to the change of price, or the demand will not change no matter how the price changes, or the slight change of price will cause the infinite change of demand.

② Income elasticity. An indicator to measure the response of the demand of a commodity to the change of consumer income, divided by the percentage change of demand.

③ Cross elasticity. An index to measure the degree of response of the demand of one commodity to the price change of another commodity is calculated by dividing the demand percentage of the first commodity by the price change percentage of the second commodity.

Supply elasticity includes supply price elasticity and supply cross elasticity. Supply (price) elasticity is an index to measure the response degree of a commodity's supply to its own price change, which is calculated by dividing the percentage change of supply by the percentage change of price.

Demand elasticity and supply elasticity can be divided into point elasticity, arc elasticity and general method.

Point elasticity is the elasticity Edp=(dQ/dP)*(P/Q) of a point on the demand curve or supply curve, and arc elasticity is the arc elasticity between two points on the demand curve or supply curve, also known as the midpoint method, (Q2-q1)/[(Q2+q1)/2]/(P2-. General formula: △ q * p/△ p * q. (P stands for price and Q stands for demand and supply)

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