The futures market in agricultural products and an evaluation of the attitude of farmers: a case study of cotton producers in Aydin Province in Turkey
New Medit, vol 10, n.2, (June 2011), pp. 58-64
Jel classification: Q13, Q18
This study evaluates the futures market, well-established in the world but newly developing in Turkey, in the context of the agricultural sector. It also presents the findings of a survey which shows the attitudes of farmers towards the futures market in agricultural products. This survey was carried out among the cotton farmers of Aydın province in Turkey; the study identifies and details the views and opinions of farmers on the futures market. When the level of knowledge of cotton farmers about the futures market was examined, it was found that 74% of farmers had no knowledge of the market, and the remaining 26% had very little knowledge. It was found that 90% of these farmers have tendency to use the futures market. The remaining 10% were deterred by worries such as their belief that the risk in the futures market was very high, their lack of knowledge on how the commodity futures exchange works, the fact that trade in futures on the commodity futures exchange was not viewed as real transactions, or their fear of not being able to fulfil the annual contracts for cotton which they had with the cooperatives they belonged to.
cotton, price risk, cotton futures, futures markets, farmers’attitudes