How far is the era of futures agriculture? cotton farmers no longer have to "gamble" on the market.

1. With seed cotton "futures", cotton farmers no longer have to "gamble" the market.

In the eyes of the villagers of Dongjiawan Village, Dong Yuan is an "old cotton".

Dongjiawan Village, located in Qixingtai Town, Zhijiang City, Hubei Province, is a major cotton producing area. Dong Yuan, 56, has been growing cotton for nearly 40 years since he was 18.

Years of cotton planting experience, let Lao Dong fully feel the power of the market. "it doesn't take much machinery to grow cotton, it takes a lot more effort than growing other crops. After working hard for more than half a year, it means that you can sell it at a good price after autumn. But the market price is really not accurate, rising and falling, there is a lot of difference between inside and outside the pocket. "

2010 Mel 2011 cotton year, domestic and foreign cotton prices appeared a rare "double, and then halve" sharp fluctuations. The skyrocketing and plummeting market has made many cotton farmers suffer. But Dong Yuan not only lost nothing in that year, but also earned a lot more. The magic weapon to make money against the trend is the seed cotton "futures".

Dong Yuan said that in 2011, he and the cotton cooperative under Hubei Baiyin Cotton Industry signed a "futures" order of 4000 jin at an agreed price of 6.50 yuan per jin. He harvested a total of 6000 jin of seed cotton from his 10 mu cotton field. "the price of cotton jumped sharply that year, and when it was settled with the cooperative, the market price was only 4.35 yuan per jin. My order of 4000 jin will increase my income by 8600 yuan. It was really conservative at that time. If I had signed more, I would have made more money. " Up to now, Lao Dong still regrets that he was not bold enough.

Seed cotton "futures" is not a formal trading variety in the futures market, in fact, it is the orders signed by cotton farmers with cooperatives. Li Chun, general manager of the agricultural products division of Hubei Baiyin Cotton Group, said that like general orders, the "futures" contract of seed cotton also stipulates that cotton farmers should sell seed cotton that meets the grade requirements to cooperatives according to the contract price on time.

But unlike ordinary orders, companies have used futures market hedging to lock in the sales price of agricultural products in advance. The purpose of signing a contract is that the purchase volume of the contract is basically the same as that of hedging. The purchase price agreed in the contract is determined backwards according to the price at which the enterprise participates in the futures market hedging. In order to control the risk of farmers' performance, the contract requires farmers to pay a deposit equal to 15% of the contract amount to the cooperative when signing the contract. Li Chun said, "this model means that farmers indirectly use the futures market for risk management and stabilize their income." Before sowing, we already know the selling price of cotton, so we don't have to gamble on the market any more. "

In fact, in addition to locking in sales prices in advance, Dong Yuan can also get a unified supply of seeds and fertilizers from cooperatives. In the process of planting, cooperatives provide technical guidance to farmers by organizing technical training meetings and building a high-yield demonstration base, and also send information such as cotton growth characteristics, key points of field management and cotton spot market dynamics to farmers through the construction of a short message platform, and guide farmers to pick, sun, store and sell seed cotton according to levels when they are on the market. "the reason for doing this is to control quality from the source. With good quality, the operating efficiency of the enterprise can be guaranteed, and the enterprise can feedback to the farmers through the order price. " Li Chun said.

two。 Using Futures flexibly to insure "order Agriculture"

Today, the global agricultural market has entered a high-risk era of sharp price fluctuations. With the increasingly close relationship between domestic and foreign markets and the transmission of uncertain factors at home and abroad, China's agriculture has also entered a stage of high input, high cost and high risk. The influence of natural risk, quality and safety risk, especially market risk on agricultural production and operation is becoming more and more prominent.

The steady development of agriculture depends to a large extent on the prevention and control of risks. In traditional agricultural production, it is difficult for small farmers to avoid the impact of market price fluctuations in the face of a large market. In view of this malpractice, the rise of order agriculture has stabilized farmers' income and psychological expectations to a certain extent, but in practice, the risk of price fluctuation of agricultural products has been largely transferred to enterprises. Farmers have a high risk of default when the market price is high, and enterprises face losses when the market price is low.

In order to solve this problem, in recent years, some leading enterprises of agricultural industrialization have begun to explore futures agriculture, a new agricultural production and management mode on the basis of order agriculture. that is, the futures market will be introduced into the production and operation process of planting, purchasing, processing and selling of agricultural products. At present, the cooperation mode of "company + cooperative + peasant household, order + futures" is the most widely used in Hubei Baiyin cotton industry.

Experts believe that the greatest advantage of futures agriculture lies in the formation of an effective interest linkage mechanism. On the one hand, connect enterprises with professional cooperative organizations and farmers through orders; on the other hand, connect enterprises and futures markets through futures. Li Chun said, "Enterprises use the futures market to find prices and determine order prices more reasonably." When the order price is high, it can stabilize farmers' income expectation, and when the price is low, it can help farmers to adjust the planting structure. At the same time, enterprises can avoid the risk of price fluctuations of agricultural products and lock in profits by participating in the futures market hedging. "

Another advantage of futures agriculture is the transfer of risk. Market risk is eternal. The huge market risk faced by agricultural production can not be completely eliminated by the introduction of futures, but the risk between enterprises and farmers can be transferred to the futures market through the hedging operation of enterprises in the futures market. From foreign experience, the cooperation of spot market and futures market of agricultural products will help to form a reasonable price system.

Futures agriculture can also promote the upgrading of agricultural industry. There are strict quality inspection standards for delivery objects in the futures market. according to the standards set by the national standard or futures exchange, agricultural industrialization enterprises will devote themselves to improving production technology, technology and quality. The government and the main body of agricultural production will also increase investment in water conservancy, science and technology, machinery, seed cultivation, etc., improve standardized production capacity, and then promote industrial upgrading.

3. Perfect policies, innovate tools and strengthen the construction of agricultural risk management system

Jiang Yang, vice chairman of the CSRC, said a few days ago that 21 futures varieties of agricultural products have been listed in China's futures market, and a variety system covering grain, cotton, oil and sugar has been basically formed. With the increase of the number of varieties, more and more agricultural subjects use the futures market to manage production and operation, and dock with other financial instruments to achieve effective risk management.

However, on the whole, the current agricultural risk management and service system is still not perfect, and there are still many problems to be solved to further improve the quality and level of futures market services for agriculture, rural areas and farmers.

As far as the "company + cooperative + farmers, order + futures" model of Baiyin cotton industry is concerned, although the margin system is designed to avoid the default risk of farmers, it is not foolproof to rely on the existing futures tools only. For example, when the market price is 15% higher than the order price, farmers may still default, but if the margin is increased, it will increase the burden on farmers. Therefore, experts suggest that China should study the introduction of agricultural products options to facilitate agricultural enterprises and farmers to more effectively manage the price risk of agricultural products. Farmers or cooperatives can directly buy put options to manage the risk of price decline of agricultural products, or enterprises and farmers can sign a reserve price order in advance, and then buy put options on agricultural products in the futures market to hedge their exposure.

Futures market is a standardized market, which has specific requirements for the quality and delivery area of agricultural products, but the domestic agricultural market is broad and scattered, and the quality identity is not strong, especially fresh agricultural products are difficult to meet the requirements of standardization. In the future, the futures market needs further breakthroughs and innovation, rely on the on-site market to strengthen the construction of the over-the-counter market, enlarge the market function, and further enrich and improve the services to the agricultural industry.

At present, all kinds of domestic financial and intermediary institutions are still lagging behind in promoting "agriculture, rural areas and farmers" services in cooperation with the futures market, banks do not make clear the relationship between agriculture-related credit and hedging, and the "futures + insurance" business is still in the early stages of development. Relevant experts from the Dalian Commodity Exchange proposed to attract the extensive participation of all kinds of financial and intermediary institutions to provide new products, new tools, and new services for solving the difficulties of agricultural financing, expanding agricultural insurance, and meeting the risk management needs of agriculture-related enterprises.

At present, the production of small farmers in our country still occupies the dominant position, and the consciousness and ability of farmers to participate in the futures market need to be enlightened. In recent years, the scale of new agricultural operators has been expanding, they are more sensitive to market risks and more eager for effective means of risk management, but most of them do not have the awareness of using the futures market to avoid risks. In the future, we need to make greater efforts to cultivate farmers' modern market awareness, guide them to learn to make use of the futures market, grasp the initiative in production and management, improve their ability to control the market, and get out of the dilemma of "increasing production without increasing income".