농산물 가격 위험관리와 밭떼기거래의 개선방안

Agricultural Price Risk Management with Agricultural Forward Contracts

The fact that the Battegi contract, a kind of agricultural forward contracts, is one of probabilistic investment games has not been well recognized. Sellers(Buyers) of Battegi contracts have rights(obligations) to sell(buy) products at higher price than market price when harvest price is lower than expected, or have obligations(rights) to sell(buy) at lower price than market price when harvest price is higher than expected. The rights and/or obligations from the contracts must be completed so that the contracts can be used as price risk management tools. One way for the contracts to be completed is to make sure the completion by installing stronger commitments(that is, to make it virtually forward contracts), or another way is to raise upfront fee for the contracts high enough to compensate the high volatility of agricultural product prices(that is, to make it as an option).