Study On Food Security Based On Agricultural Futures Market

In recent years, with the development of market economy in China and the accelerating pace of food system reform, especially because of the changeable international food situation, issues on food security become one of the important factors that the government must consider when makes macro decisions. Issues on food security mainly involve three aspects: one is the domestic food production and supply, the second is domestic food reserves and rotation, the last is the regulation of food import and export. Food production cycle is long and easy to be affected by natural conditions and market changes, which results in the volatility of food production and price. The current circulation system of food is easy to cause the structural contradiction of food supply and demand. The handling mechanism of food reserves in China is lack of flexiblity, and the efficiency of macro-controlling is low, which causes to some extent distortions in food supply and demand. With the further opening of agricultural market, food trade of China is also facing greater risk. The futures market which has unique economic functions can play a special role in the maintenance of food security. The several no.1 files and eleven plannings in recent five years show that China has been paying seriously attention to the food security issues and the development of agricultural futures market.Based on the previous studies, the dissertation employs various theories as the theoretical framework which includes theories of cobweb, warehousing, hedging, volatility, factor endowments and economic globalization. In the dissertation, ensuring the national food security is analysed as the research target and improvement of agricultural futures market as a method. By considering the various relevant factors affected food security and using combined methods of theoretical, empirical, macro and micro analysis, the dissertation analyses the relationship between food security and the agricultural product futures market, and explains how to furtherly exploit the economic functions of agricultural futures market under the market environment of food purchasing in order to stabilize food production and prices, to improve food circulation system, state food reserves system and food international trade, to increase the farmers" income, and to improve the ability of government's macro-regulation. The study in this dissertation provides new ideas and a new perspective to ensure food security. The main content and conclusions of the dissertation are as follows:Firstly, based on comprehensive related research, the dissertation use five evaluating indicators of food security to analyse the basic conditions of food security in China and analyses the relationship between food security and agricultural futures market by combining the economic functions of agricultural futures market and the evaluating indicators.Secondly, by using Cox - Stuart tendency test for the food production and cultivated area it is found that the overall tendency of food production in China is on the rise, but the cultivated area is declining. The transverse and longitudinal comparison of the food production fluctuation discovers that the fluctuation of food production is instable, and in most of years the coefficient of fluctuation is over 2%, but the intensity of fluctuation after the marketization reform is lower than that before the marketization reform. Among the four varieties of food, the greatest contribution to the total food output is rice, which also has the largest influence on the changes of total food output. Based on the transverse and longitudinal comparison of food price fluctuation, it is discovered that the fluctuation range of food price index is higher than that of other relevant price indexes, and after marketization reform the intensity of food price fluctuation is higher than before. There is a stable equilibrium relationship and mutual granger causality between food price and food output, however, the output changes have a greater influence on price changes than that of the price changes on output changes, the variation of output often lags behind price changes and has the characteristics of divergent cobweb. A improved theoretical framework of the cobweb is constructed to explain the mechanism that the futures market slows the volatility of food price and output in actual market around the equilibrium point.Thirdly, based on review on food circulation system reform in China, it is discovered that the reform has produced important influence on the development of food futures market. Although the reform experienced a zigzag process, the marketization direction of reform has been insisted, and the food security is the main line of the reform. China has made some achievements about marketization reform of food purchasing, but also faces with some problems, and exploiting futures market can furtherly perfect the marketization reform of food purchasing. Because the level of food logistics system is one of the decided factors of food circulation ability, food logistics system becomes the main factor that restricts food security, and the development of food futures market is helpful to construct modern food logistics system.Fourthly, Although China has made certain achievements in food reservess management, the operation of food reservess in the actual market exists great risk, and through the analysis of relationship between food reservess and food prices, it is found that there is not very significant effect in leveling fluctuation of food market prices by food reservess, and to a certain extent, there exists the phenomenon of reverse operation. Using agricultural futures market can reduce operating risks and improve the operation efficiency of food reservess.Fifthly, through the analysis of the food trade status of China, the dissertation analyses the necessity and feasibility of exploiting international market reasonably to solve food security problems. Considering the risks that the enterprises engaging in food importing and exporting trade face with and global commodity pricing mechanism, the dissertation analyses the influence of lackness of pricing right on food security in China. The dissertation takes wheat as an example and empirically studies the agricultural futures market at home and abroad, and furtherly confirmes the lackness of pricing right for China. Therefore, the dissertation argues that we should perfect agricultural futures market, establish pricing mechanism centre of key food varieties, enhance the pricing right and the right to speak in the international food market, coordinate trade policies, exploit international food futures market, improve food reserves system, avoid food trade risk, establish new pre-warning system of food security, develop large dealers, use futures markets in international markets for the national food security.Sixthly, the direct food subsides currently implemented have a little effect to promote farmers' income, and there exists certain contradiction between food security and farmers' income, and the futures market is a new method to coordinate the contradiction. However, there are many factors that restrict the use of futures market by farmers, currently farmers in China use futures market indirectly.Seventhly, the dissertation proposes a series of proposals about using agricultural futures market to ensure food security.These proposals include popularizing knowledge on futures market, cultivating bodies of agricultural futures market, expanding the scale and varieties of agricultural futures, establishing and perfecting information releasing and transfering system in the futures market and actual market, actively yet prudently enhancing the degree of opening-up and internationalization in the futures market, strengthening the degree of association between the futures market and actual market. In the environment of marketization reform of food purchasing and under the background of global economic integration, the proposals have positive significance for the stability of food production and price in China, perfection of food circulation system, improvement operating efficiency of food reserves, reasonable utilization of the international food market and increasing farmers' income.