An analysis about scattering agricultural risk of farmers based on contract farming

Contract farming connects an enterprise and farmers into one system, it will scatter agricultural risk which is caused by fluctuating of farm products' market price between leading enterprise and farmers. Consequently farmers that only can support little risk will be faced with less agricultural risk. Joining in contract farming will cause farmers income fluctuate, and the fluctuation can be measured by standard deviation or coefficient of variation. By way of analyzing average income of the farmers who have planted garlic in Henan province, this paper illustrates the agricultural risk of farmers who have adopted contract farming, from the perspective of standard deviation and coefficient of variation. The result show that contract farming, as one of the most important pattern of the industrialization of agriculture, is playing an important part in scattering farmers' agricultural risk, and promoting the adjustment of agricultural structure.