The agricultural futures market originated in Chicago, USA in the middle of19th century. With its special trading system design, the price formed is recognized as the most authentic and authoritative price signal, which plays a unique role in the price risk management of farmers. At present, the United States is the most perfect and mature country in the development of agricultural futures market. American farmers, regardless of the planting scale, are used to making production and management decisions by using the price information in the futures market.
After years of development, China's agricultural futures market trading rules and systems have been continuously improved, trading volume and positions have been rising, and its influence has been expanding. However, due to the late start and immature development of China's agricultural futures market, there are still many problems. For example, traders in the agricultural futures market are still mainly small and medium-sized speculators, but the participation of farmers who really need to avoid risks is very low, and excessive speculation is serious. Excessive speculation increases the irrational fluctuation of futures prices, which makes futures prices break away from the spot basis and cannot truly reflect the supply and demand situation, which seriously weakens the price discovery and risk avoidance functions of futures markets.
Our government attaches great importance to the important role of agricultural futures market in serving agriculture, countryside and farmers. Governments at all levels and agricultural products futures service agencies have taken a series of measures to promote the docking between farmers and futures markets, but the results are minimal. It is the direction of agricultural development to make full use of the futures market of agricultural products to avoid price risks, but few farmers participate in the futures market in China, and a series of measures taken by the government and futures market service institutions have not been well accepted by farmers. The author believes that the reasons for this distortion are as follows:
First, the supply and demand of futures services do not match. An important reason for China farmers' low participation in the futures market lies in their low awareness of the futures market. Most farmers don't know what futures are, let alone how to operate them. Although the government and the futures exchange provide a lot of publicity, education and training services for farmers, they fail to fully consider the characteristics and actual needs of farmers. Many farmers who have received publicity, education and training services still have a low understanding of the futures market, and are far from being able to use the futures market directly or indirectly, resulting in most farmers still "staying at a respectful distance" from the futures market.
Second, there is a lack of professional agricultural cooperative organizations. Most farmers in China are scattered small-scale producers based on families, so it is difficult to participate in centralized large-scale agricultural futures trading. In addition, farmers lack understanding and operational ability of the futures market, and need guidance and help from professional cooperative organizations. However, at present, the operation of agricultural specialized cooperative organizations in China is not standardized, and the level is generally low. There are very few specialized cooperative organizations that can help farmers make effective use of the futures market. At the same time, there is no close interest linkage mechanism between farmers and agricultural cooperative organizations, so it is difficult for agricultural cooperative organizations to play their due role in helping farmers connect with the futures market, and the effects obtained by farmers participating in the futures market through agricultural cooperative organizations are also difficult to be transmitted to farmers.
Third, the innovation of futures varieties lags behind. On the one hand, China's existing agricultural futures contracts are single in scale, and there are no small contracts suitable for small and medium-sized farmers to participate in hedging. In the absence of professional agricultural cooperative organizations, these farmers are virtually "shut out". On the other hand, there are too few varieties in the futures market, which is not commensurate with the status of a big agricultural country. There are too few listed varieties, which restricts the scope and ability of the futures market to serve farmers' production and operation. In addition, although the agricultural product option has been included in the variety development plan for many years, it has not been solved. Agricultural product option maintains the price of agricultural products at a certain level with its unique trading mechanism. The lack of option products not only reduces the choice opportunities for farmers to use the futures market, but also reduces the attractiveness of the futures market to farmers.
Fourth, the risk protection measures are not perfect. Farmers can avoid the risk of price fluctuation by hedging in the futures market, but if hedging is not done well, they will also face some potential risks, which is one of the reasons why some farmers are unwilling to use the futures market. Farmers' use of the futures market is a dynamic process, and it takes a long time from entering the market to contract liquidation or delivery, and they will face risks such as changes in the spot output of future positions and changes in the margin caused by price fluctuations in future positions. At present, our safeguards for potential risks are not perfect enough to eliminate farmers' worries about using the futures market.
To sum up, the author puts forward the following suggestions to realize the effective docking between farmers and futures market.
First of all, realize the normalization and case study of publicity, education and training. According to the characteristics of farmers, targeted publicity, education and training should be carried out, and a normalized system should be formed. In the method of publicity and education, we should strive to adopt vivid and easy-to-understand case forms and set up special futures consultation hotlines in various regions to answer farmers' questions at any time.
Secondly, promote the construction of futures professional cooperative organizations. Help farmers to establish futures professional cooperative organizations and give them some support in terms of policies and funds. Explore scientific cooperation methods and service models to improve the service level, service capacity and service efficiency of cooperative organizations. Optimize the interest linkage mechanism between farmers and cooperative organizations to prevent possible default risks of both parties.
Third, promote the futures system and variety innovation. Innovate the variety listing system and change the highly administrative and multi-headed examination and approval system. Accelerate the research and design of small contracts corresponding to existing trading varieties, and arrange the listing of new varieties with mature conditions as soon as possible. Actively introduce agricultural product options.
Finally, establish and improve the risk guarantee system. Explore the establishment of agricultural products futures risk protection fund and futures special development fund, try to introduce agricultural insurance, and set up special guarantee institutions and management institutions. Shao Yongtong (Author: School of Economics, Tianjin University of Commerce)