How far are farmers from the futures market? What if it is difficult to sell grain?

At present, China has basically established a futures variety system of agricultural products, including more than 10 varieties, including cotton, grain, oil and sugar. Futures market price has become an important price signal for arranging agricultural production and adjusting planting structure, which is conducive to alleviating the contradiction between agricultural small-scale production and large market. However, there are still many constraints on how to make farmers better participate in the futures market and how to make effective use of the price discovery and hedging functions of the futures market.

For a long time, relying on heaven for a living is an unavoidable reality for many farmers, and agricultural futures seem to be some distance from rural areas. Farmers look close, but in fact they are still far away. In fact, the relevant documents have repeatedly proposed that it is necessary to innovate the circulation of agricultural products, improve the futures trading varieties of bulk agricultural products, and actively guide farmers to participate in the futures market.

This year, the No. 1 document of the CPC Central Committee once again put forward clear requirements for the construction of agricultural futures market, which is to develop agricultural futures trading and develop new varieties of agricultural futures trading. It is understood that Zhengzhou Commodity Exchange and Dalian Commodity Exchange are strengthening the research and development of new varieties of agricultural futures, and cotton yarn, animal husbandry products, forest products and seafood are all under research and preparation.

What if it is difficult to sell grain?

How to help the members sell the corn? In the face of a mountain of corn piled up in hundreds of farmers' yards, Shang Guiyong, chairman of Guiyong Corn planting Professional Cooperative in Yixian County, Liaoning Province, was helpless.

Shang Guiyong told reporters that their cooperative now has more than 500 members and has planted more than 8000 mu of corn. When they were hit by a severe drought last year, they did everything possible to preserve corn production, but unexpectedly encountered the market risk of a decline in the corn market. Up to now, Yixian has not started corn temporary storage acquisition, and most grain trading enterprises have not entered the market to buy. Shang Guiyong doesn't know where to sell corn. He tried to get in touch with a futures company, hoping to find a way out of the futures market.

In recent years, the state has carried out market-supporting acquisitions of major agricultural products such as rice, wheat and corn, the fluctuation of the grain market is very small, and farmers' awareness of risk management is indifferent, so they do not think it is necessary to avoid risks through the futures market. "now that the temporary storage policy for soybeans and cotton has been cancelled, market price fluctuations may intensify." Liu Zhaofu, chairman of Heilongjiang Bolang Investment Consulting Co., Ltd., said.

While investigating in Northeast China, the reporter learned that the expected active soybean trading market did not appear in the pilot areas of the soybean target price subsidy policy. Farmers thought that the soybean price was low and held grain for sale, while enterprises thought that the soybean price was high and the wait-and-see mood was strong, and the soybean transaction was deadlocked. Wang Xiaoyu, deputy secretary general of the Heilongjiang Soybean Industry Association, believes that this is mainly because the interests of farmers and enterprises are different. Farmers want soybean prices as high as possible, and enterprises hope that the lower the better, and there is a lack of a purchase and sales system that can satisfy both sides. In the United States, farmers and enterprises can achieve docking through the futures market. When the grain is not harvested or even sown, farmers can sell the grain at the right price through the futures market to protect their value. Grain processing enterprises can purchase raw materials at the right price through the futures market.

The futures market has the dual functions of price discovery and avoiding market risk. Farmers can use the price discovery function of the futures market to understand the price trend of agricultural products, grasp the market rules, and also make use of the risk aversion function of the futures market to strengthen risk management by cooperating with market organizations or leading enterprises. "now we should actively guide farmers to understand the futures market, participate in the futures market, and resolve market risks through the docking of the futures market with enterprises." Wang Xiaoyu said.

Dalian Commodity Exchange is an exchange mainly focused on agricultural futures, and 10 of the 16 futures are related to agricultural products. Since 2005, the big trading institute has launched the market service project of "thousands of villages and ten thousand households", engaged in training, information services, and pilot projects of "companies + farmers, orders + futures". By the end of 2013, the firm had trained more than 70,000 people, including farmers, heads of agricultural cooperatives, cadres of the agricultural system and marketing personnel.

How to participate in the futures market

Chen Yanjun, a senior analyst at Zhengzhou Grain Wholesale Market in Henan Province, believes that the futures market is a virtual market, and the futures price of agricultural products is affected not only by spot fundamentals, but also by macroeconomic, monetary policy and other factors. Participation in the futures market requires strong professionalism. At present, the possibility for farmers to directly participate in the futures market is very small, and they can cooperate with new agricultural operators such as cooperatives and leading enterprises to participate indirectly in the futures market.

Last year, Dashang and relevant market institutions explored the "cloud mode" of "guaranteed land lease agreement + futures + over-the-counter options". The specific mode of operation of this model is that farmers sign a land lease agreement with Jilin Changling Yuntian Agricultural Professional Cooperative, which provides farmers with agricultural materials and modern equipment, specializes in the management of corn planting, and ensures food quality. The risk management subsidiary of the futures company signs a spot procurement contract with the cooperative. when the purchase price of corn is higher than the temporary storage price, the risk management subsidiary of the futures company buys the spot corn and gives the cooperative a second chance to point the price before selling the corn. During the price preservation period, if the grain price falls, it will be carried out in accordance with the original preserved price; if the price goes up, the cooperative can make a second settlement according to the actual point price (the actual price that appears in the market). In this way, the cooperative transfers the market risk to the risk management subsidiary of the futures company, and the risk management subsidiary of the futures company hedging the risk through the futures market.

In fact, farmers can also participate in the futures market through cooperation with leading enterprises. It is understood that at present, more and more domestic grain enterprises participate in the futures market, and large grain and oil processing enterprises such as Cofco Group and 93 Fats and Oils have been skillfully using the futures market hedging operation to avoid market risks. But at present, many grain enterprises are restricted by factors such as lack of talents and limited own funds, so they do not have the conditions to participate in the futures market.

In the mode of many farmers' participation in the futures market, the "grain bank" may become another form to guide farmers to participate indirectly in the futures market. In recent years, China has launched a pilot project of "grain bank", that is, grain processing enterprises provide farmers with a series of value-preserving and value-added services, such as deferred point purchase, short-term financing and grain price insurance, while providing grain warehousing and purchase business for farmers.

At present, there are still some bottlenecks restricting the large-scale development of the "grain bank". The development and growth of the "grain bank" needs the support of financial markets, including futures, insurance and banks. It is understood that the firm has begun to study how to strengthen and improve the supporting measures of the futures market to better serve the "grain bank."

To enter the market, you need to act according to your ability.

At present, the production of small farmers in China still occupies a dominant position, and they do not have the ability and consciousness to participate in the futures market. Although the scale of new agricultural operators such as agricultural cooperatives continues to expand, they are more sensitive to market risks and more eager for effective means of risk management, but the vast majority of new agricultural operators have no awareness of evading market risks through the futures market.

The relevant responsible person of the Dashang Institute told reporters that in order to guide farmers to participate in the futures market and give better play to the role of the futures market in serving "agriculture, rural areas and farmers", efforts must be made in many aspects.

First of all, we should make greater efforts to cultivate farmers' modern market consciousness. We should not only pay attention to technical training for farmers, but also guide farmers to learn to make use of the futures market, grasp the initiative in production and operation, improve their ability to control the market, and get out of the dilemma of "increasing production without increasing income."

Secondly, we should continue to promote large-scale operation of agriculture and improve the ability to resist market risks. Some experts suggest that farmers from thousands of households should be organized to dock with cooperatives or leading enterprises, and the production and operation risks of farmers should be pooled and transferred by cooperatives and leading enterprises through the futures market.

We should also further promote the innovation of varieties and tools, launch options for agricultural products such as soybeans, soybean meal and cotton as soon as possible, and enrich market tools. The agricultural product option is equivalent to a price insurance, which can guarantee the rise and fall of grain prices after paying the option fee.

The futures market is a standardized market, which has specific requirements for the quality of agricultural products and delivery areas, but the quality identity of domestic agricultural products is not strong, and the market is vast and scattered, which requires further breakthroughs and innovation of the futures market. 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. It is understood that now the futures delivery warehouse of Dashang is gradually transferring from the sales area to the producing area, has established a soybean delivery bank in Harbin, Heilongjiang Province, and studied the scheme of adding an extended delivery bank in the producing area.

With the in-depth development of China's agricultural modernization, futures and other financial instruments are becoming a powerful means to promote the development of agriculture, rural areas and farmers. However, some people in the industry believe that the futures market is a "double-edged sword" and that farmers, major grain growers, farmers' professional cooperatives and leading agricultural enterprises should participate in the futures market scientifically and rationally. Under the current situation, farmers should mainly make good use of the price discovery function of the futures market and grasp the initiative in production and management; farmers' professional cooperatives and leading agricultural enterprises should bear certain responsibilities and take over the operational risks of ordinary peasant households. Use the risk aversion mechanism of the futures market to resolve the risk.