As the chairman of the Heilongjiang Bei'an Revolutionary Modern Agricultural Machinery Professional Cooperative, Li Fuqiang has been busy with various preparations before spring ploughing and production recently.
In response to the country's call to expand soybean planting, Li Fuqiang has continued to expand the planting scale in recent years, and last year his cooperative planted 200,000 mu, and this year plans to increase it again. "Our cooperative has contracted 300,000 acres of land, and this year's planting plan is 400,000 acres, mainly planting soybeans. Li Fuqiang said.
Heilongjiang has two major plains, Songnen and Sanjiang, with superior water and soil resources, and a solid foundation for the development of agricultural mechanization, scale and modernization. Li Fuqiang has led the cooperative to continuously expand the planting scale over the years, and has experienced the benefits of scale effect, but expanding soybean planting is a systematic work, and the problems that need to be overcome have also increased.
From spring ploughing to autumn harvest sales, not only to deal with disasters and weather fluctuations, price fluctuations and other risks, but also sometimes face the problems of difficult loans and unstable grain sales channels.
The "Bank-Futures Insurance" project was launched by the Dalian Commodity Exchange (hereinafter referred to as "DCE"), which is based on the comprehensive upgrade of "insurance + futures" income insurance, and aims to further explore and solve the problem of financing difficulties in planting links and difficulties in selling grain when the market is poor in the later stage by systematically introducing leading enterprises and banks to participate in the "guaranteed income".
As an upgraded version of the "bank-futures insurance" project, in what form do leading enterprises and banks participate in it? How does the whole project play the role of financial instruments to relieve the difficulties of soybean farmers? This reporter recently came to Bei'an City and Heshan Farm in Heilongjiang Province to investigate the implementation of the project.
Create a closed-loop chain to solve the difficulties of financing and selling grain for farmers
In the process of Li Fuqiang's expansion of soybean planting, the problem of capital has become a hurdle that cannot be bypassed. "In the early stage, you need to pay a large amount of rent to transfer the land, and after the spring planting begins, you need to buy seeds, pesticides and fertilizers. Li Fuqiang also calculated an account for the reporter on the planting cost: "In 2023, the land rent for planting soybeans is 13,000 yuan per land (15 acres), and the cost of seeds, fertilizers, pesticides, and machine farming is 3,850 yuan." In this way, Li Fuqiang promotes the scale of planting, and the start-up capital required is as high as hundreds of millions of yuan.
In the face of the large capital needs of growers, banks have their own concerns about lending. The reporter learned that due to the lack of sufficient collateral and effective guarantee methods for farmers, banks can provide very limited loan support for risk control considerations, even if it is a pure credit loan, the loan amount is often delineated as an upper limit, which is undoubtedly a drop in the bucket for growers with large capital needs.
And even if the wind and rain are smooth, there is still a link of "realization" in the realization of planting income. If the market is not good and the market is sluggish, there are questions about whether the peasants are willing to sell and whether they can sell them, and this will not only affect the peasants' incomes, but will also be detrimental to repaying the loans in full and on time.
In response to this "dilemma" situation, the "Bank-Futures Insurance" project introduces leading enterprises and banks on the basis of "insurance + futures", and not only solves the problem of farmers' difficulty in obtaining loans and selling grain, but also dispels banks' lending concerns by creating a closed-loop chain from planting to selling.
"Through the 'bank-futures insurance' program, farmers can not only lock in the minimum income in advance during the preparation period to ensure that soybeans can be sold, but also obtain credit support efficiently and conveniently, providing financial guarantee for soybean expansion. Chen Chi, director of COFCO Futures' "Insurance + Futures" business, introduced the specific process of the "Bank-Futures Insurance" project to reporters: "Futures companies and insurance companies first jointly provide 'insurance + futures' income insurance based on futures prices to the insured entities. Then, the leading enterprise signs a soybean forward order purchase contract with the insured entity. Based on the target income guarantee formed by the soybean forward order purchase contract and income insurance, the bank provides loan support based on a certain percentage of the target income to the insured entity. ”
Under Chen Chi's matchmaking, Li Fuqiang finally participated in the "Bank Futures" project, and the soybeans with a planting area of 75,000 mu also successfully obtained loans totaling 51 million yuan from the Postal Savings Bank, solving the problem of insufficient funds at that time.
Asked about the repayment method of bank loans, Li Fuqiang said: "When the crops are ripe, we will send all the soybeans to COFCO Trading's warehouse, and COFCO Trading will settle the grain payment as soon as possible, and the actual grain payment will be used to repay the bank loan first, if the grain payable is not enough to repay the entire loan, and the compensation from income insurance will be used to repay the loan owed." ”
As a bank, Shen Jinbin, vice president of the Agricultural Bank of China's No. 93 Branch, was full of praise when he mentioned the cooperation mechanism of joint management and information sharing established with insurance companies and futures companies in the "bank-futures insurance" project: "This effectively breaks the information asymmetry between banks and growers, and the bank uses income insurance policies and orders of leading enterprises as a means of credit enhancement, which greatly improves the security and efficiency of loans, and the stability and profitability of growers' operations are also guaranteed." ”
The second point price is guaranteed to protect the income and the insurance claim is strongly protected
It should be pointed out that growers sign purchase contracts with enterprises during the preparation period, but the market trend is changing rapidly, and a simple "fixed price" method is sometimes not suitable.
Recalling the sales of the soybean market in 2023, Zhou Meiling, industrial director of CITIC Futures Heilongjiang Branch, remembers it vividly. "After the new beans are listed in 2023, the opening price will be 2.50-2.60 yuan/catty, which is lower than the same period in the previous two years. With the large-scale harvesting, the supply continues to increase, the market supply is sufficient, but the downstream procurement enthusiasm is not high, and the soybean purchase price of large traders around the country continues to fall, which puts soybean prices in the producing areas under pressure. As the purchase price is lower than market expectations, some farmers have a wait-and-see mentality of holding on to grain and hoping to sell it at a good price. Zhou Meiling said.
In the face of such market sentiment, Li Fuqiang, who participated in the "bank-futures insurance" project at that time, was confident, because DCE standardized the acquisition and pricing links, and combined basis pricing and secondary point price to effectively protect the sales income of growers.
"The so-called secondary point price, that is, after the acquisition of leading enterprises, also provide a two-month repricing opportunity for insured farmers, the specific operation is to purchase call options from futures companies by leading enterprises, and futures companies to hedge the risk of rising prices through the futures market. In other words, after the grain payment is settled, the growers still have the opportunity to obtain the rising income. Chen Chi told reporters.
The second point point is the futures price, which needs to analyze and predict the trend and fluctuations of soybean futures and operate in a timely manner, and because he has not directly participated in futures trading before, Li Fuqiang bluntly said that it is not easy to fully understand. In this regard, in the process of the second point of price, the futures company provided help and advice to Li Fuqiang like a "professional consultant", which made him feel deeply: "During the point price period, COFCO Futures often communicated with me about the market situation, and reminded me whether to point the price at key nodes, for example, at the end of November, when the price briefly soared, I seized the opportunity, and finally the price successfully allowed me to obtain an additional income of 480,000 yuan." ”
Talking about the secondary price mechanism, the relevant person in charge of Heshan Farm Grain and Oil Trading Company said, "The mechanism effectively avoids the reluctance to sell while ensuring the income of growers, and also stabilizes the supply of goods for grain collection enterprises." Through the 'Bank-Futures Insurance' project, our company has tried to use OTC options for the first time to hedge the risk of price fluctuations in the process of production and operation, so as to provide better services to growers and have a closer cooperative relationship. ”
In the "bank-futures insurance" project, income insurance policies are also a core part, and insurance claims have become a matter of great concern to growers. In this regard, Chen Chi said that since the project requires all grain collection enterprises to purchase, then the purchase and storage volume of enterprises can be used as the actual output data of the insured entity. At the same time, the main body of grain planting, insurance companies, and grain receiving enterprises will also jointly confirm the data.
"At the time of insurance, all plots are entered into the system and monitored by technical means. In addition, there are third-party technology companies responsible for the whole process of risk management services, and there will also be field inspections during the planting process, so as to assist in the identification of crop growth, form more objective supporting data in the warehousing and claim settlement links, and help all parties form a consensus. Li Yichen, the contact person of the Bei'an project of CPIC Property & Casualty, said.
According to Li Yichen, the cooperative began to deliver grain in October last year, and received the claim payment before the end of the year, and the claim price was determined based on the average price of the futures contract in the month before the expiration of the insurance. "Some of our plots have been flooded, and one acre of land may have to pay more than 200 yuan, but fortunately, there are insurance compensations, which help us protect our basic income, so that I can continue to farm with peace of mind. Li Fuqiang said.
It is understood that last year, DCE established a total of 8 special projects for soybean planting and harvesting in 7 counties and districts in Heilongjiang, serving 15 large planters and cooperatives and 2 Beidahuang state-owned farms, covering a planting area of 332,400 mu and involving a premium of 19.42 million yuan. (Farmer's Daily, Gao Wen, Zhang Yuancheng)
