As a Chinese saying goes -- 'when the grain is cheap, the farmers suffer.' The price of crops has long been a main factor in rural poverty. And now, Chinese financial markets have started pilot schemes to deal with the consequences of difference in prices to help those in need. CGTN's Feng Yilei has a story from northeastern China.

Plant in spring, harvest in autumn. Corns have long been the staple crop for hundreds of impoverished families in the dry land of Yangshuling village. But, falling prices in recent years have become a pitfall of a once stable income. This is especially true after the country ended a nine-year corn price support program to reduce its huge stockpiles. Now, in an unstable market, farmers have found a new way to cope.

LI GUANGYOU, FARMER YANGSHULING VILLAGE "Last year, our co-operative planted over 700 hundred acres of corn, but the price was much lower than expected. Thanks to a deal with futures company, we got subsidies and didn't lose money amid the fluctuation in prices."

It was the second, and a larger-scale attempt in the region, that corn futures was introduced into targeted poverty alleviation. Two village co-operatives bought over-the-counter options for ten thousand tons of corns from a futures brokerage company. And, they managed to get compensation of nearly a million yuan, as market prices fell below an agreed-upon amount when the period ended. Meanwhile, the company performed option replication in the futures market to hedge their own risks.

XIA YING, DIRECTOR OF INSTITUTIONAL REGULATION DEPARTMENT LIAONING BUREAU OF CHINA SECURITIES REGULATORY COMMISSION "As a local securities regulatory body, we seek to eliminate poverty by combining national policies with the capital market. Corns are the main income source of Yangshuling farmers and the trading of corn options has just been launched at the Dalian Commodity Exchange. The pilot project shows how futures companies can serve social interests with their expertise."

FENG YILEI YANGSHULING VILLAGE, LIAONING PROVINCE "But, to further promote and commercialize the approach of agricultural futures in guaranteeing the income of the impoverished grain producers, two major problems need to be solved—high premium costs and low risk awareness. That requires support from all parties—including the local government, commodity exchanges, futures companies and leading enterprises in the sector."

XIA YING, DIRECTOR OF INSTITUTIONAL REGULATION DEPARTMENT LIAONING BUREAU OF CHINA SECURITIES REGULATORY COMMISSION "It's hard to let farmers invest in something high-risk without seeing a payback. In this case, the futures company covered the one-million-yuan premium purely for public welfare. But, the high costs for companies to hedge risks remains a big problem. In the initial stage, commodity exchanges and futures companies have invested a lot of money. And, now we can see the local government that has gradually joined in."

It has been the third consecutive year that China's No. 1 Central Government Document calls on the need to develop the use of futures, insurance and contract farming to prevent potential risks. Experts say, as a series of new attempts have been put into practice across the country, this will also enable farmers to put more energy into production and entrust risk management to professional institutions. By the end of last year, one of the cooperatives in Yangshuling village has successfully been lifted out of poverty.

GAO ZHIJUN, SECRETARY OF PARTY BRANCH YANGSHULING VILLAGE "Last year we used the compensation to develop a cooperative economy, standardized management, and most importantly -- pay dividends to farmers. It has greatly helped to wipe out poverty and we will consolidate this new mode with more funding and promotion."

And, it's not just a matter of increasing earnings. Local officials say farmers are getting more aware of the significance of risk management and planting planning. They are now more willing to equip themselves and their next generation with financial knowledge. And that gain will lay a sound ground for the future well-being of local people. Feng Yilei, CGTN, Yangshuling village in Liaoning Province.