Use **, insurance for orders for agriculture

Today, the global agricultural market has entered a high-risk era of volatile prices. With the increasingly close connection between domestic and foreign markets, domestic and foreign uncertainties communicate with each other, and China's agriculture has also entered a stage of high investment, high cost and high risk. Natural risks, quality and safety risks, especially market risks, have become increasingly prominent in agricultural production and operations.

The steady development of agriculture depends largely on the prevention and control of risks. In traditional agricultural production, small farmers face large markets and it is difficult to avoid the impact of market price fluctuations. In response to this drawback, the rise of order agriculture has stabilized the income and psychological expectations of rural households to a certain extent. However, in practice, the risk of agricultural product price fluctuations is largely passed on to enterprises. When the market price is high, the farmer's default risk is high. When the market price is low, the company faces losses.

In response to this problem, in recent years, some leading agricultural industrialization enterprises have begun to explore the new agricultural production and operation model of futures agriculture on the basis of the order agriculture, that is, to introduce the futures market into the production and management of agricultural products such as planting, procurement, processing, and sales. . The most widely used currently is Hubei Baiyin Cotton Co., Ltd.'s cooperation model of “company + cooperative + farmer, order + futures”.

Experts believe that the greatest advantage of futures agriculture lies in the formation of an effective interest linkage mechanism. On the one hand, enterprises are linked to professional cooperative organizations and farmers through orders; on the other hand, companies are linked to futures markets through futures. Li Chun said, “The enterprises use the futures market to find prices and more reasonably determine the order price. When the order price is high, it can stabilize the income expectations of the farmers. When the price is low, it can help the farmers adjust their planting structure. At the same time, enterprises participate in futures market hedging. Avoid the risk of agricultural product price fluctuations and lock in profits."

Another advantage of futures agriculture is risk transfer. Market risk is eternal. The huge market risks faced by agricultural production cannot be completely eliminated by the introduction of futures, but the risks between the enterprise and farmers can be passed on to the futures market through hedging operations by the company in the futures market. Judging from overseas experience, the cooperation between the agricultural product spot market and the futures market will help form a reasonable price system.

Futures agriculture can also promote the upgrading of the agricultural industry. The futures market has strict quality inspection standards for the physical delivery. In accordance with the standards set by the national standard or futures exchange, the agricultural industrialization enterprise will strive to improve production technology and technology and improve quality. The government and agricultural production entities will also increase their investment in water conservancy, science and technology, machinery, breeding of improved varieties, increase the standardization of production capacity, and further promote industrial upgrading.