Farm futures to help real economy
China Daily | Updated: 2018-01-08 07:49
SHANGHAI - Apple farmers in Yijun county of Northwest China's Shaanxi province no longer need to overly worry about drops in apple prices, thanks to financial instruments that they may find difficult to understand.
By paying a small premium, the farmers can receive compensation from insurance companies if the market price falls below a specific amount.
Conversely, insurers can buy financial derivatives on apples from futures companies, hedging their risks if the apple price rises too much.
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