The Impact Of Financing On Potato’s Production And Distribution

After nearly 40 years of reform and development, tremendous changes have taken place in China’s economy and society, especially evident in the field of agriculture. In the process of agricultural industry transformation, the demand of capital for agricultural development has increased significantly, financing demand of agricultural practitioners are also improved significantly, which require a higher service capacity of the rural financial market. At present, the rural financial market and the development of the rural economic development of the increasingly prominent, the rural financial market failure, the serious shortage of agricultural financing and other issues, has become an important factor in the transformation of agricultural development. First of all, to promote agricultural financing, we need to study how the financing promote agricultural development. Along with the accelerating process of agricultural industrialization, it’s insufficient to study the financing problem only from a single process in the micro level, when it is necessary to study the financing behavior on the trade of agricultural products at the same time. Loans, credit are both important form of agricultural financing, meanwhile, research on comprehensive studying loans, credit financing for the development of agriculture affects is underexplored.Based on the survey data, this paper uses the descriptive statistics and quantitative analysis method to study the impact of financing on the production and distribution of potato. First of all, we use industrial economics analysis framework—SCP, to analyze and evaluate potato production and trade from the overall trend by investigating, collecting data and comparing two short panel data. Second, using descriptive statistical methods, according to the survey data, for analysis and summary of the financing behavior of potato farmers and brokers,using the linear regression equation and Logit model respectively from farmers and brokers to study the impact pattern of production and circulation of potato. Third, we extract the key features of group development of farmers and brokers, we divide farmers and brokers according to the development process in different groups, and to explore the impact on farmers and traders’ development process by using nonlinear regression equation we try to extract the key features of group development of farmers and brokers. We divide farmers and brokers according to the development process in different groups, and to explore the impact on farmers and traders’ development process by using nonlinear regression equation. Fourth, we supplement and improve the production and trade mode through a case study; and finally, we give some corresponding suggestions according to the above research.Through theoretical analysis, field survey, data statistical description and measurement model construction and test, the following conclusions are drawn in this study:1. Potato production and trade process were undergoing a significant change, at the same period, the demand for funds was increased. The trend of stratification of farmers appeared, the degree of specialization of production increased, the mechanization process was obvious, and potato production appeared technology upgrade. Brokers’ business scale expanded, their business scope had a significant increase. These changes had increased the demand for money. Agricultural production per mu investment increased, average loan from 3016 Yuan in 2007 rose to 4165 Yuan in 2012. In 2012 the average broker loan amount reached to 103.7 thousand Yuan.2. Credit financing was an important financing channel for farmers, 60% farmers and 28% traders get financing. At the same time, financing scale through the formal credit was still limited, only 4% of the farmers and 19% of the brokers had obtained formal loans from financial institutions.3. The effect of loan on the production and trade of potato was mainly reflected in the expansion of the scale. Farmers expanded business scale and improved fertilizer input by borrowing, and brokers expanded business scale and promoted potato storage by borrowing. Further distinguished the farmers borrowing channels, we found that regular borrowing and informal loans promoted the expansion of the scale of farm production, but only non-formal loans increased the input of chemical fertilizer per mu.4. The role of credit for potato production was reflected in the increasing production resource input and improving the output. Potato farmers’ credit behavior had a significant positive effect on the input of chemical fertilizer per mu, Mu mechanical inputs, per mu of the total investment, yield and commercialization rate.5. The six key indicators to evaluate the development degree of the farmers are family business scale, according to the different meeting degree of the six indicators above, farmers are divided into the traditional farmers, the farmers in the development and the modern farmers. Regression results show that borrowing and credit promoted the development of farmers in the process of transition, at the same time, age of the head of household had a significant negative role on farmers in the process of transition, and family population, the number of livestock family had a positive effect on the development of farmers.6. The four key indicators to evaluate the development degree of the brokers are annual operating for several months, whether or not to engage in the wholesale business, the number of monthly potato purchase, in the wholesale market whether owned or rented booth; According to the different meeting degree of the four indicators above, traders are divided into traditional brokers and modern ones. The regression results show that loan had a significant positive impact on the development process of brokers.7. The new financing mode was based on the supply chain can promote the integration of potato supply chain, taking the "Potato industry credit" and the electricity business as representative, which is a new way to broaden the financing channels of agriculture.According to the above conclusion, this paper gives five suggestions as follows: First, we need to put the trade stage into the rural financial system; Second, guide and standardize the development of informal finance; Third, reducing commercial banks credit abuse; Forth, developing financial products used in agricultural dealers. Fifth, developing financing tool of potato supply chain.