Concerning economics in general or specifically agricultural economics?

Specifically agricultural economics

Thanks sir

Hedging - is taking a position in the futures market with the objective of minimising price risk in the spot/physical market. These positions could either be long or short. Futures contracts bought or sold are hedged against physical commodities. Speculations are buying and selling futures or derivatives purely for profit taking purposes.

I would supplement with the simplicity that in future markets speculator bears the price risk and aims at profit maximization, generally with the open positions (sell or buy). On the other hand the hedger passes on price risk to the speculator and takes position on a given price by buying or selling at future dates. Any one can be speculator or hedger. Conceptually farmers (producers) should be the hedger; however, the large Indian potato producers (farmers) have been seen acting as speculator in the market. As expected, corporates, consuming agricultural produce as raw material have been found hedging (purchasing at future dates) in order to avoid losses due to price fluctuation.

This answer largely repeats, but is more concise than, the previous answers: hedgers are trying to reduce risk. Speculators are trying to increase profit.

Hedgers reduce risk -- and also reduce their expected rate of return. Buying life insurance is an example. The buyer reduces risk -- but has to pay to do so. Speculators in pursuing profit will typically have to increase their risk.