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Case: Why is contract farming so fragile?
Agricultural products have a long production cycle and are greatly influenced by the natural environment, so it is not suitable to operate in the form of quantitative and pricing order contracts. For example, manufacturers and farmers agree on the price and quantity of agricultural products and sign contracts. If there is a bumper harvest, some farmers who can't receive the manufacturers can't establish their own transportation and sales channels, which is equal to nothing; If the harvest is not good and the contract is not completed, you will be liable for breach of contract. Therefore, agricultural products should have strong intermediate links, such as the adjustment of state machinery or capital institutions. The state guarantees to buy all agricultural products, guarantee the minimum purchase price when the harvest is good, and compensate farmers when the harvest is bad ~ or use futures to ensure the interests of farmers when the harvest is good or bad, that is, to protect the interests of downstream processing industries. However, this form of futures introduces a lot of speculation. Now it seems impossible to compete with foreign speculators, and local agricultural and processing enterprises are easily killed, which deviates from the original intention of stabilizing agricultural production.