Financial services provide safety net to secure livelihoods of farmers
Financial businesses in Qingdao have played a key role in targeted poverty alleviation, aided by local government support, providing much-needed financial services to rural cooperative businesses across the country.
One such example is Galaxy Futures, which has a branch of operations in Qingdao’s Shinan district.
In the wake of the outbreak of the pandemic, the local government visited businesses in Shinan to see how it could assist them in reopening and getting production back on track.
At that time, Galaxy Futures was drawn to the attention of several poverty alleviation projects taking place in various locations across the country, including those which required financial services such as loans and insurance.
A couple of days after Galaxy Futures was visited by the local authorities, Cai Minglei, an official of the Shinan district government assigned to work in Dangchang county, Gansu province, to assist in the local fight against poverty, helped the company apply to take part.
Listed as a severely povertystricken county, Dangchang relies on traditional agriculture for its income. Leveraging its advantages in financial services, Galaxy Futures put together plans to provide insurance and futures for the local chicken farmers in Dangchang.
For the project, the Shinan district government provided Dangchang county with an insurance premium of 300,000 yuan ($45,880). This money could be used to buy insurance for the agricultural industry over four periods from September to December last year, covering 21 local chicken breeding cooperatives and benefiting 2,439 impoverished households, according to local officials.
Galaxy Futures and the Shinan district government bought insurance for 3,500 metric tons of eggs, with the total insured amount valued at 29.39 million yuan.
“Farmers were paid 518 yuan each, which is a tangible benefit to every impoverished household and helped them to avoid risk and increase their incomes,” said Pang Dawei, general manager of the Shinan branch of Galaxy Futures.
In the past, farmers had been limited to weak agriculture yields dependent on weather, and they could only expand the feeding size if there was a price rise, which lags behind the market, Pang said.
Fighting poverty with insurance and futures can help ensure farmers have egg stockpiles and are more resistant to market fluctuations with payment protection, he explained.
It also helps farmers not to fall back into poverty because of egg price reduction, he added.
According to Cai from the Shinan district government, the project has paid out 1.26 million yuan in compensation so far.
Combining insurance and futures has not only helped to benefit cooperatives and farmers, but also the whole industry, Cai said.
He Xusheng, a manager of a cooperative in Dangchang county, said, “Through the insurance and futures, farmers in our cooperatives are more confident in adhering to the industry, and many farmers have made plans to expand their businesses.”
Insurance and futures can help to reduce operation risk and ensure the benefits of farms, and thus help to realize targeted poverty alleviation, He said.