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agriculture

Farmers secure crops on stock market

Published måndag 30 juli 2012 kl 18.55
"It's a clean deal"
(2:06 min)
Photo: Scanpix.

Due to fluctuating wheat prices, an increasing number of farmers in Sweden are hoping to secure their income by getting their crops secured on the stock market.

Throughout history, farmers' livelihoods have depended on how generous harvests are in any given year. Extreme weather could mean a poor harvest. Moreover, farmers have also suffered from fluctuating produce prices.

In Sweden, the price of wheat is particularly unpredictable. That's why many farmers are now heading to the banks to protect prices for parts of their grain crops.

Farmers have previously gone to the biggest crop buyers in Sweden to strike deals. Now however, more farmers are choosing to secure crop prices directly on the stock market. It's a move that gives them a lot more power, as it means companies and buyers can then bid on a set price for the crops.

Karl Persson works at the Swedish bank Handelsbanken's raw materials section. He helps farmers sell their crops on the market, and he told Swedish Radio that the price of grain has jumped recently, which means the size of his clientele is growing.

"It's very much on the rise right now", he says. "Since the beginning of the jump in prices we've had a lot of new customers. Only yesterday we recieved three more."

Persson says securing the price of crops on the market means farmers aren't bound to a physical buyer anymore - they're free to sell to the highest bidder.

Farmer Erik Björnsson told Swedish Radio this is a new way to take control over their produce.

"It's a clean stock deal", he says. "when I think the price is high, I protect a share of my crops."

"I wouldn't say there's a generational gap among farmers, but this is a new way of thinking in Swedish farming. We're heading away from the old days of harvesting crops and taking the tractor to the market to sell them", he said.

And with the prices of grain looking higher than usual this year, it's a trend that could continue.

Our journalism is based on credibility and impartiality. Swedish Radio is independent and not affiliated to any political, religious, financial, public or private interests.
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