Study On The Evaluation And Control Of Agricultural Credit Risk

Modern agriculture has been a major trend of the world's agricultural development for more than two hundred years. It is essentially a revolution in production methods. Finance is the core of modern economy and capital is the"blood"of economic development. In the process of the transformation from traditional agriculture to modern agriculture, capital and capital input have been the most crucial factors in modern agricultural development. However, modern agriculture of cross-regional, large-scale production has more depended on policies, institutions and other factors. New means of agricultural production, such as anti-season mode, sheds mode, means increasing capital investment, and also means that influence by nature, the market and technology increase. agriculture and industrial production of the enterprise adding elements of modern business, associated with the enterprises operation, integrated production and brand marketing, has increased business risks and market risks in the process of industrialization of agriculture production. These all cause losses to the credit funds, which lead to credit risk. Therefore, the research on assessment and control of modern agricultural credit risk is of great theoretical and practical significance to promote the development of modern agriculture and the construction of a new socialist countryside.Based on the fundamental theory of modern agriculture, financial support theory of agricultural credit and risk management theory, this paper analyzed credit risks characteristics of modern agriculture, revealed creating mechanism of agricultural credit risk, constructed the assessment index system of modern agricultural credit risk, and also through analysis of financial indicators and expert fuzzy evaluation, researched modern agricultural credit risk assessment with quantitative and qualitative methods, in order to construct the internal and external control mechanisms of modern agricultural credit risk.Except the first chapter—introduction, and the eighth chapter—conclusions and recommendations, this paper can be divided into six chapters.The second chapter dealt with the theoretical basis of modern agricultural credit. Firstly, it explained and defines the concept of"modern agriculture", pointing out the essential differences between modern agriculture and traditional agriculture, and it also analyzed thoroughly the basic features of modern agriculture and development models of Chinese modern agriculture; Secondly, it discussed the relationship between development of modern agriculture and financial support, indicating that the development of modern agriculture needs lots of credit support; finally, it showed that there exists the risk of modern agricultural credit, and demonstrated the process, method and evolution of current risk management, and illustrated the application of risk management theory in banking business. This chapter provided theory support for the other chapters.The third chapter discussed the creating mechanism of agricultural credit risk. This chapter analyzed the mode of modern agriculture production, based on regionalization, scale, and market-oriented. Modern agriculture has not only the general risks of agricultural production, such as: natural risk, operational risk and market risk, but also expanded and intensified many special risks of modern agricultural production, such as: policy risks, institution risks and technical risks. Based on this, it summed up classification and grade of the modern agricultural credit risk, pointed out that modern agriculture credit has policy risk, environmental risk, credit risk, market risk and operational risk, and researched deeply internal and external factors of the formation of China's banking credit risk. The fourth chapter described the construction of assessment index system of modern agricultural credit risk. It analyzed the principle, function and significance of the construction of assessment index system of modern agricultural credit risk, and explored the assessment index systems of leading enterprises, newly-built enterprises, and investment companies in open-developing regions of modern agriculture.The fifth chapter discusses the empirical analysis of modern agricultural credit risk. This chapter has empirical analyzed credit application of company A, to make assessments of policy and environmental factors influence, to evaluate management level, credit status, competitiveness, solvency, profitability, operating capacity and development capacity of company A from qualitative and quantitative angles. Thus it got the assessment report of its credit grades, and made the assessment report on project loan.The sixth chapter constructed the internal control of modern agricultural credit risk. It discussed the internal control theory of commercial bank risk, and established internal controls system of modern agricultural credit risk, through training the risk control culture of staff, establishing scientific corporate checks and balances mechanism, completing credit management and improving internal audit.While the seventh chapter dealt with the external control of modern agricultural credit risk. In view of the problems of external control of modern agricultural credit risk, this chapter raised to strengthen direct supervision of financial institutions, from angle of the market access, scope of business, liquidity of assets and capital adequacy, loan quality, senior management and deposit insurance, to establish modern agricultural credit assets risks transform and compensation mechanisms, which is made up of policy agricultural insurance, commercial agriculture insurance, reinsurance and catastrophe insurance, to strengthen social credit system construction and improvement, and to improve and perfect the market discipline mechanism of disclosure system, the legal regulation and supervision of industry associations ,so as to establish a system of external control of modern agricultural credit risk.