Study On Supply Chain Internal Financing Of Seasonal Agricultural Products

This paper intends to analyze the relation between supply chain internal financing and seasonal agricultural development. In China, agricultural products, especially the seasonal agricultural products, operate and manage by farmers themselves, which leads to volatile markets for agricultural products. On the one hand, this volatility increases the risk of farmers' decisions, affects the enthusiasm of farmers planting, which resulting in farmers'income increases slowly and widening the income gap between the urban and rural residents; on the other hand, agricultural price volatility is not conducive to the stable operation of agricultural supply chain, which reduces the competitiveness of the supply chain and affects the normal operation of the entire national economy. In the end this will affect the international competitiveness of Chinese agricultural products. Therefore, it's urgent for rural and national development to find a stable fund supply way of reducing risk of agricultural markets, increasing farmers'income constantly, to farmers, agriculture equilibrium agricultural price. And the agricultural finance supply chain can provide stable fund for farmers and maintain the smooth functioning of the supply chain, therefore to stabilize the prices of agricultural products and to bring healthy and stable development of agriculture. On the one hand, stable agriculture development will increase the income of farmers, reduce rural-urban gap and promote social harmony; the other hand, the agricultural related products will develop quickly, stabilize the CPI. This will promote economic healthy and sustainable development.In the real world,,at present, the fund of seasonal agricultural supply chain roots in formal and informal finance in our country. Formal finance includes personal savings, bank loans, government subsidies. These funds has played an important supporting role in some agricultural products, especially government-supported agricultural products. However, these funds are not synchronized with the development of agricultural products and can not fully meet the requirements of the rapid development of seasonal agricultural products for the state fiscal and economic policy. Informal funds include private loans, Rotating Savings and Credit Association, foundations of finance, underground banks and pawn, etc., these funds have played an important role in promoting a certain region-specific agricultural development partly. However informal financial capital is to seek profit. They get into the product field when this prodoct's pirce is getting higher, which will push the price higher. They will get out after winning more profit. And this will cause price drop seriously. This situation will destroy agricultral development perennially. Therefore, to find a long-term, stable, perfect way of agricultural funds supplying for the healthy development of agricultural products, sustainable economic growth is very important. The internal funds supply between agricultural supply chain is more sustainable, lower financing costs, reducing financial risk for agricultural development. The internal fund exchange between agricultural supply chain provide a stable source of funding to promote the development of agriculture. On the other hand, it establishes a stable supply channel to avoid sharp price fluctuations, promote the sustained and healthy economic development.Compared with previous research, this paper's innovation is:to use the power of self-development of agricultural products to solve the problem of agricultural development funds. Thought in the agricultural development process, especially in the seasonal agricultural development, the plight of funds can be sovled by supply chain capital flow from the terminal to the middle and lower. The feasibility and rationality of these conclusions are demonstrated by model and solved the risk and countermeasures through the game theory. Its feasibility is verified by example and proved good prospects for agriculture development.About the whole structure, this paper describes the status quo-model analysis-to establish programs-empirical research ideas. First, the paper describes characteristics of seasonal agricultural products, capital investment, capital requirements and analyses the current fund supply situation of seasonal agricultural products. Based on this, further analyses the characteristics of seasonal agricultural supply chain and the role, status of the current rural development. From1980, the implementation of rural households in single-family practices leads to investment in agriculture full completed by individual farmers. Although it inspired enthusiasm of farmers and promoted agricultural development to some extend, it can not adapt the current mechanized way. Especially, with agriculture industrialization developing, the financial capital in rural economic development play a more important role as foreign capital began to enter China's agricultural development. This individual will be replaced by more advanced methods. The supply chain practices will be its possible future direction. But after the implementation of supply chain practices, the method of funds supply is firstly be sovled by various supply chain. Various manufacturers solve by themselves alone or the implementation of integrated financial supply chain. Therefore, we must find the right financial solution to promote seasonal agricultural products development.Secondly, the paper analyzes the method of seasonal agricultural capital supply. Capital supply of agricultural products are from personal savings, bank loans, government subsidies, private loans, rotating savings and credit association, foundations of finance, underground banks and pawn. Formal finance has played an important role in the rural economic development. But it does not fully meet the demand for capital in rural areas. Informal finance was derived to satisfy the supply of agriculture financial capital. Because of its illegality, informal finance was pressed by formal finance. Its effect in promoting agricultural development is limited. We must develop a formal, sustained development of agricultural products into the supply of funds to promote healthy and rapid development of agricultural products. The funding exchange between supply chain can solve this problem. Then, this paper uses modeling methods to compare the gains of the farmers, the vendors and the sociaty between self-funding supply and external funding supply. It's thought that self-funding supply can lower financing cost, improve sales of agriculture and probability for the farmers, and bring better quality, stable raw-material supply to improve profits for the vendors. And the society benefits from this method in high quality and low price product. It will promotes the rural development to achieve balanced society development. It analyzes the condition and agricultural type used self-funding supply. And it also analyzes the possible risk of self-funding supply and it's solution by game theory. It can achieve long-term development of supply chain only if the parties share profit and cost in accordance with the appropriate contribution, encouraged and punished by their performance appraisal in supply chain development.Finally, the conculsion is tested by tobacco industry development in China. Self-funding supply chain's develpment is analyzed and thought it can promote the development of China's agricultural modernization, largely solve the lack of rural financial development. It's a feasible way to promote agricultural development and improve the rural economic development.