Luoyuan Introduces “Baoyubao” to Promote Industry Growth
To empower farmers to gain the upper hand in the market
Luoyuan introduces “baoyubao” to promote industry growth
At the processing plant of Fujian Honghang Aquatic Products Co., Ltd., workers were freezing fresh abalone. (Photo by Liu Qiyi)
It is currently the peak season for abalone harvesting and sales in Luoyuan. On June 12, CCTV’s program World Finance (Tianxia Caijing) aired a report focusing on the local abalone harvesting activities in Luoyuan. On the same day, the first “Baoyubao·Warehouse Receipt Pledge Loan” in Luoyuan was successfully signed at the Songshan Branch of the Luoyuan Rural Credit Union, representing a significant breakthrough for the Luoyuan abalone industry.
“In the past, whenever abalone prices dropped, we could only worry and had no way to manage it. But now, with ‘Baoyubao,’ we feel much more assured,” said Chen Daifeng, an abalone farmer from Luoyuan. He signed the first “Baoyubao·Warehouse Receipt Pledge Loan” on June 12, securing a credit limit of 300,000 yuan. The signing of this special contract not only reflects Chen Daifeng’s hopes and aspirations but also marks the official launch of Luoyuan County’s innovative “Platform + Warehouse Receipt Pledge” model.
Abalone farming is a key pillar of Luoyuan County’s marine economy, supporting more than 2,500 farming households and generating an annual output value of 3 billion yuan. However, seasonal price fluctuations, extreme weather conditions, and unpredictable market risks often leave many farmers struggling during price slumps. Meanwhile, banks face difficulties in supporting the industry’s growth due to a lack of reliable data and standardized processes.
To address this issue, Luoyuan Rural Credit Union, after thorough discussions with Fujian Honghang Aquatic Products Co., Ltd., has introduced the “Baoyubao·Warehouse Receipt Pledge Loan” based on the “Platform + Warehouse Receipt Pledge” model.
During the abalone harvest season, farmers can sell a portion of their live abalone at market prices while sending the rest to processing companies. The abalone is then frozen using liquid nitrogen and stored in warehouses. The Rural Credit Union provides loans to farmers based on established guidelines, which can be used to purchase seedlings, feed, and other necessary supplies. When prices rise during the off-season, farmers can sell the frozen abalone, using the proceeds to repay the loan and cover other costs. This strategy functions like a well-designed “reservoir,” effectively regulating market supply and demand. It helps prevent price crashes during the harvest season caused by oversupply, protecting the farmers’ income.
“With this model, if the market isn’t doing well, I can store the abalone and sell it when prices are better later in the year. Now, I have control over the situation,” Chen Daifeng said with a smile.
In this innovative framework, the government, banks, and businesses each play a crucial role. The government takes the initiative by setting up a 20-million-yuan risk capital pool for warehouse receipt pledges, providing a safety net to support the industry’s growth. Luoyuan Rural Credit Union, leveraging the Smart Fish Farming Cloud Service Platform, introduces the “Baoyubao · Warehouse Receipt Pledge Loan.” This loan offers farmers credit worth 60% of the value of their stored abalone, providing a vital financial boost for secondary production. Fujian Honghang Aquatic Products Co., Ltd. plays a pivotal role in the storage and sales process. By providing specialized refrigeration, processing, and storage services, the company facilitates off-season abalone sales. During periods of sharp market price fluctuations, it proactively ensures stable sales, acting as a cornerstone for the industry’s steady growth. (Fuzhou Evening News Reporter: Liu Lu; Correspondents: Liu Shuting, Liu Qiyi)