Based On The Options And Futures Of Contract Farming Default Risk Research

Contract Farming is an agricultural business model to organize production according to market demand,production and sales orders make enterprises and farmers formed a kind of special agricultural products supply chain.Development of contract farming can effectively docking enterprises and farmers, to ease the contradiction of small production and big market,It will to our country to deepen reform of rural operating system, solve the problem of agriculture, rural areas and farmers, promote the farmers’ income and rural economic development play a positive role.However, the default rate of Contract Farming is long-term high in our country,In order to improve the performance status of Contract Farming, this paper will introduce options and futures trading to the existing "Enterprise+Farmers" Contract Farming mode.Discuss how to avoid the risk of sales of agricultural products of Contract Farming,Fundamentally reduce the enterprises and farmers default motivation, prevent the happening of the breach.At first, this paper systematically summarizes the research achievements of predecessors, and introduces the related theory of Contract Farming. Secondly, based on game theory studies the enterprises and farmers in a fixed price and increase the liquidated damages case decision problem,And analyzes the order of risk of default under the three types of price,The results show that the fixed price Contract has higher risk of default, and the farmers are willing to accept "guaranteed purchase price fluctuate in line with market conditions" the terms of the contract. Then, this paper puts forward a kind of "Enterprise+Farmers+Option+Futures" Contract Farming mode,The farmers with enterprises signed a put option contract to transfer their own sales risk to the enterprises,At the same time, enterprises through hedging in the futures market, to transfer their own sales risk to the futures speculators. So as to realize the externalization of the sales risk of entire Contract Farming.Finally, through a numerical example to simulate and test the effectiveness of options and futures trading to transfer Contract Farming sales risk.,and combined with a similar case analysis the feasibility in the actual operation,The study showed that new Contract Farming mode can effectively transfer the sales risk of farmers and enterprises,eliminate their fundamental breach of motivation, and help to improve the rate of Contract Farming fulfillment.