Student-Led  Initiative Launches Inclusive Finance Fundraiser for Smallholding Farmers

By : Zhiyao Ma, Isabella Pezzulli, Qiulin He

 

“If only $20 can protect the income of an acre of land, then it is money well spent!”

 

“We rural smallholders hate bad weather and price uncertainty. Hail storms and droughts come in turn…”

An orchardist, Zhixue Zhang, has spoken out about the natural disasters and price fluctuations that plague small farmers growing cash crops in developing countries. But due to the “Insurance + Futures” model, a new type of agricultural product insurance established in China in 2015, farmers like Zhang can now protect their income.

 

The model was developed by referencing similar schemes in developed countries, such as the Price/Revenue Protection in the United States. However, for most small farmers in developing countries who have barely escaped poverty, it is difficult to find the spare money to insure agricultural products, and the concept may be difficult to implement without support.

To address this, the Inclusive Finance for Underrepresented Farmers (IFU) project was established by the China Siyuan Foundation for Poverty Alleviation, with the support of fourteen diversified students studying at well-known American universities. They raised approximately USD 200,000 from philanthropists and corporations through their joint funding efforts.

 

Aiming to eradicate poverty, promote agricultural crops’ security, and support sustainable economic growth in rural areas, the IFU is supporting the United Nations’ Sustainable Development Goals (SDGs) for rural development. Through financial inclusion initiatives for smallholding farmers, the IFU project contributes to the goals of these SDGs, promotes sustainability, and reduces financial inequality.

The project has already helped over 200 fruit farmers in Northwest China by providing a premium subsidy of CNY 500 to cover self-payments, guaranteeing an income of about CNY 20 million for 330 acres of fruit fields.

 

In addition, local educators have received subsidies to spread knowledge of inclusive finance to the general public in rural areas and promote production-based learning.

 

Deputy Director of the IFU project, Kefan Guo, stated: “Over the next five years, more than one million yuan in special funds for public welfare and rural revitalization will be allocated from the IFU project to encourage small farmers in remote areas around the world to participate in inclusive financial poverty alleviation models such as “Insurance + Futures.” This will help farmers to develop self-preservation and risk resistance, stabilize income and agricultural product prices, and cultivate industries in rural areas.”

 

The project is a perfect example of the growing international public welfare forces that are being cultivated by countries all around the world. In today’s turbulent times, it is rare and valuable to see cooperation to alleviate poverty affecting farmers, who are so often under-represented.  The project continues to gain traction, with plans to extend to southeast Asia starting this summer.