1. The futures market in the United States is very developed, with rich varieties of agricultural products futures, and grain producers, processors and middlemen actively participate in the futures market.
There are many ways for American farmers to participate in the futures market. Large farmers have strong financial strength and sufficient information sources, and can directly participate in the futures market, but most farmers indirectly participate in the futures market through cooperatives. According to statistics, there are nearly 2,000 grain cooperatives in the United States, which control 60% of domestic grain sales. Farmers generally sign contracts with cooperatives in advance to sell grain to cooperatives at the agreed price, while cooperatives avoid price risks through the futures market.
Judging from the situation of western developed market economy countries, the proportion of farmers directly using the futures market for hedging is not high. A recent survey in the United States shows that less than 65,438+00% of manufacturers use hedging to manage their price risk. Why is the futures market, as an effective means of price risk management, rarely used by farmers?
(A) There are many alternatives to risk management.
Farmers have many ways to manage agricultural risks. They can adjust the financial structure to maximize the value of the enterprise. In fact, most producers use different strategies and tools according to the scale of operation and the degree of control over resources.
1. Organized action. Organized management is an institutional arrangement to deal with uncertainty. Agricultural enterprises (organizations) can not only save transaction costs, but also reduce uncertainty. The establishment of agricultural contract integration organization (company+farmers) can stabilize the purchase of raw materials by order enterprises, reduce market transaction costs, and transfer farmers' market risk, technology risk and lending risk to order enterprises, so that both parties can achieve a win-win outcome in the interaction of contract organization relationship. This way of risk transfer is to internalize the risk, that is, to distribute it within the members of the organization, but the risk of market price still exists within the organization.
2. Decentralized operation. Faced with the uncertainty risk of agricultural product prices, market participants often adopt decentralized management to ensure future income. The diversification of farmers is somewhat similar to the management of financial instruments. For example, managers of mutual funds generally hold multiple stocks at the same time, which disperses and limits the risk of holding a single stock. Diversification strategy can only control the risk within a certain range.
3. Agricultural insurance. The basic principle of agricultural insurance is to share risks and losses. That is, most of the insured who have not suffered losses under the same risk conditions share the economic losses suffered by a few people. The main difficulty of agricultural insurance is that agricultural risks occur in a large area at the same time, and the risk loss is large, so it is difficult for insurance companies to underwrite. In addition, due to the small scale of farmers, it is difficult to pay premiums.
(B) through cooperative organizations to spread risks
Cooperatives are established spontaneously by farmers, participate voluntarily and are dominated by farmers themselves. The main purpose of cooperatives is to help farmers sell grain and avoid price risks. 70% of the corn in the United States is sold by agricultural cooperatives on behalf of farmers, and the corn alliance, the largest grain sales cooperation organization in the United States, buys 45% of the corn production in the United States. Farmers do not directly trade in the futures market to avoid risks, but hedge in the futures market through intermediary organizations and grain storage companies. They indirectly use the price information in the futures market to guide production, thus avoiding the risks brought by production mistakes.
(C) restrictions on farmers' production scale
Except for some large-scale farmers, there are fewer farmers who directly trade futures. This is because they lack the necessary quantity of agricultural products and the necessary basic conditions (such as hardware, network system, futures knowledge, etc.) to sell a futures contract. ), and the capital required for the transaction.
(D) There are still risks in the futures market.
Most farmers think that hedging in futures trading can avoid the price risk in the spot market to a certain extent, but they still face the risks of basis, margin and additional margin in futures trading, as well as the quantitative risk of the difference between traders' trading positions in the spot market and futures market due to the uncertainty of production.
Second, the difficulties and countermeasures of China farmers using the hedging function of agricultural futures market
Farmers can enter the futures market for hedging transactions and transfer the risk of price fluctuation in the spot market in order to obtain stable income. Through the function of agricultural futures market, the interests of farmers are protected. China's agricultural futures market has gradually embarked on the track of standardized development, and the market function has also been well played. Many far-sighted producers have realized the role of the futures market, actively participated in and used the futures market, and achieved good results. However, according to foreign experience, the hedging function of China's agricultural futures market is far from enough, and farmers need to make a lot of efforts to directly use the futures market. The key is the development of agricultural intermediary organizations.
(A) the effective use of agricultural futures market is the need for farmers to transfer price risks.
It should be said that the vast number of farmers in China need agricultural futures markets. At present, most of China's grain varieties have liberalized their prices, and cotton has gradually achieved market-oriented reform. Market economy activities are full of risks and uncertainties, especially agricultural products, which have a long production cycle and are greatly affected by the weather. Natural disasters cut production and fail to harvest, and grain is collected at high prices and sold at low prices. The fluctuation of market price brings great risks to farmers' interests. Especially after China's entry into WTO, farmers will face competition in domestic and foreign markets, and the price fluctuation will be more intense.
(B) the reasons for restricting China farmers' direct use of the futures market
1. The decentralized and small-scale production organization form of farmers with family as the unit conflicts with the centralized and large-scale futures trading method. At present, the situation of scattered subjects, small scale, low understanding of market information and high transaction cost determines that Chinese farmers can only directly enter the first-level farmers' market, but not directly enter the higher-level grain wholesale market, let alone enter the futures market for hedging transactions.
2. The low educational level of farmers is contradictory to the professionalism of futures trading. China has hundreds of millions of agricultural population, high illiteracy rate and low overall education level. Most farmers in China have not yet reached the junior high school education level, so it is difficult to understand the operating mechanism and trading methods of the futures market, let alone operate it in person.
3. The traditional consciousness of small farmers contradicts the open futures market. Chinese farmers have outdated concepts and weak commodity awareness, so it is difficult to adapt to the requirements of modern futures market.
(C) the way farmers use the futures market
Farmers are the main body of the spot market of agricultural products. If a certain number of farmers do not enter the futures market, it is difficult to say that the development of the agricultural futures market is perfect. However, it is unrealistic to let a certain number of farmers directly engage in futures trading for a long time to come. The key for farmers to use the futures market is to organize scattered farmers to participate in the futures market, thus solving the contradiction between small production and large market.
1. Develop farmers' cooperative organizations. There are farmers' cooperatives in the United States and Japan, which provide convenient conditions for farmers to use the futures market to avoid risks. Farmers in China do not have the conditions to directly participate in the futures market, regardless of their knowledge level or financial strength. Therefore, we can learn from foreign experience and encourage farmers to set up various types of farmers' cooperative organizations according to the local resource advantages and the characteristics of agricultural development, and farmers themselves will organize scattered farmers. Cooperatives can help farmers use the futures market to avoid risks and provide farmers with more market information and valuable suggestions.
2. Develop "company+farmer" contract agriculture. "Company+farmer" is a powerful agricultural product purchasing enterprise that signs a forward purchase contract with farmers according to the futures price before production, and farmers transfer the price risk to the ordering enterprise through the order, thus resolving the risks that farmers may face. However, in the operation process of "company+farmer" or order agriculture mode, the contracted enterprises bear huge business risks. The futures market can provide the order enterprises with the possibility of hedging the signed contracts. Through the operation of the futures market, enterprises can disperse and transfer the price risk to many market speculators, and the futures market can become the final "export" of the price risk in order agriculture. This requires vigorously cultivating the ability of agricultural product circulation enterprises to use the futures market. With the deepening of the reform of agricultural products circulation system, various circulation cooperative organizations and agents have emerged in recent years, which can build bridges for farmers to the futures market.
You can search for hedging in Baidu. You must first understand hedging.