Factors Affecting the Acceptance of Agricultural Futures Contracts: The Case Study of Rice Farmers in Sari County

Document Type : Original Article

Authors

1 Ph.D. Student of Agricultural Economics, Shiraz University, Shiraz, Iran

2 Associate Professors of agricultural economics, Sari University of Agricultural Sciences and Natural Resources

3 Associate Professor, Department of Agricultural Economics, Sari Agricultural Sciences and Natural Resources University, Sari, Iran mmojaverian@yahoo.com

Abstract

Considering the farmer’s preferences as the main participants of agricultural futures markets affects the success of tradable contracts in these markets. According to the empirical evidences in Iran, one of the most important producers’ preferences about agricultural markets is their financial needs. In this context, the purpose of this study is determining the importance of the financial needs of farmers in the success or failure of futures contracts. The statistical population of this study is rice farmers of Sari County, which 272 farmers were selected through random sampling method as sample. In order to achieve the main purpose of this study, the effects of two variables of “level of understanding of futures markets” and “financing of farmers” as independent latent variables, along with the numbers of middle dependent latent variables on the “level of acceptance of futures contracts” as the main dependent latent variable was investigated using a Covariance Structure Model framework. Based on the results, farmers financing has a significant and positive effect on the level of acceptance of futures contracts. So, it is necessary that future contracts are designed and localized in such a way that in addition to hedging the price risk of producers, their financial risk is also can be hedged.

Keywords

References

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