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Hong adds that the government should first expand value-added tax exemptions for vegetables to cover fresh meat and egg products in order to reduce taxes and other costs in the circulation of farm produce.
To solve the problem of high circulation costs, the available 10 measures are not enough. "The most direct and effective way to reduce circulation costs is to cut the costs brought by the system and promote improvement in the circulation environment," Hong says.
At present, the circulation costs consist of three parts: system costs, unreasonable part of circulation costs and normal circulation cost. Of them, system costs are the most important, which include tolls, taxes, various management fees and fines. Some of these costs can be significantly reduced.
The Chinese Government has issued some measures to reduce tolls and some management fees, but observers say those are far from enough. In the face of rising prices of farm and sideline products, local governments are also formulating measures to cut circulation costs.
The Beijing Municipal Government decided that from January 26 to March 31, it will exempt trading fees at the Xinfadi wholesale market for eight kinds of vegetables widely consumed in the winter.
As of January 2013, Jiangsu Province had lowered the tax rate for logistics enterprises to 3 percent from 10-17 percent.
"All these are good examples of ways for reducing costs in the circulation sector. Only by reducing overall costs can the government cut circulation costs and improve circulation efficiency," said Hong.
Wang Yaoqiu, a professor at Beijing Jiaotong University, suggests that for farm and sideline products, the government should encourage big chain supermarkets to directly purchase and pack their goods from agricultural production bases in order to reduce losses and improve the quality of vegetables.
"Compared with the logistics industries in developed countries, our logistics sector has the same advanced hardware, but in each link of management, the operations are too extensive and inefficient," Wang said.
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Ten Measures
- Reducing water and electricity prices and operational fees in the production and circulation of farm produce;
- Regulating and reducing trading fees for farm produce on wholesale and retail markets;
- Enhancing supervision of transactions between retailers and wholesalers. Retailers are prohibited from charging extra fees from suppliers;
- Lowering tolls;
- Enhancing price supervision on key industries;
- Intensifying price inspection and anti-monopoly supervision;
- Improving the taxation system and alleviating tax burdens in the transportation industry;
- Guaranteeing necessary land supply in the circulation industry;
- Facilitating logistics and delivery of goods;
- Establishing a statistical system for circulation expenses | 
