China's Rural Credit Cooperatives Agriculture Efficiency And Regional Differences

Issues of agriculture, farmer and rural area are major issues affecting China’s reform, development and stability, and financial supporting agriculture has important significance to solve these issues. Rural credit cooperatives as the basic strength of financial supporting agriculture, its’ efficiency of supporting agriculture is essential for the solution to the issues of agriculture, farmer and rural area. Because that China’s rural economy has shown a strong regional difference and the rural credit cooperatives focus on different parts to provide support, it is necessary to study on China’s rural credit cooperatives’ agricultural supporting efficiency and its regional difference.This study covers the following topics:(1) Theoretical analysis of the agricultural supporting efficiency of the rural credit cooperatives, including defining the connotation of rural credit cooperatives’ agricultural supporting efficiency, analyzing the agricultural supporting mechanism of rural credit cooperatives, and exploring agricultural supporting efficiency of the rural credit cooperatives from the perspective of financial ecology and agricultural supporting model of rural credit cooperatives under the background of regional difference.(2) Analysis of the historical evolution, development status and restrictive factors of China’s rural credit cooperatives, including recalling the history of the development of the rural credit cooperatives, analyzing the present situation of agricultural supporting, and exploring the internal and external constraints of agricultural supporting efficiency.(3) Empirical study on China’s rural credit cooperatives’agricultural supporting efficiency and its influencing factors, including building evaluation index system of agricultural supporting efficiency, using undesired output DEA model and modified three-stage DEA model, and doing empirical research on rural credit cooperatives’ agricultural supporting internal configuration efficiency and external functional efficiency as well as its internal and external influencing factors.(4) Study on the regional differences on the supporting efficiency to agriculture of China’s rural credit cooperatives, including analyzing rural credit cooperatives’ agricultural supporting efficiency from space and time dimensions and investigating the structure characteristics and evolution trend of rural credit cooperatives’agricultural supporting efficiency in different regions by cluster analysis and convergence test.(5) Recommendations on the related policy as well as the improvement access to the efficiency of agricultural supporting from China’s rural credit cooperatives, including summarizing the improvement access to efficiency of agricultural supporting from both internal perspective and external financial ecology perspective of rural credit cooperatives, and eliciting policy recommendations for rural credit cooperatives’ development from the perspective of regional differences.This study reaches the following conclusions:(1) The research of the agricultural supporting efficiency should not just stay on the quantity of agriculture loans, but should be more concerned about the actual effect of the agriculture loans. Rural credit cooperatives’ agricultural supporting efficiency needs to be measured from the internal efficiency and the external efficiency. The internal efficiency approaches the quantity of internal agricultural loans, which is the agricultural supporting loans amounts and coverage. The external efficiency approaches the quanlity of external agricultural loans, which is the actual effect of agricultural loans.(2) Rural credit cooperatives’ agricultural supporting efficiency shows the local highlights, but not optimism in a whole. At the present stage, financial services provided by rural credit cooperatives are far from satisfying the development of agriculture, farmer and rural area. There are nearly one-third provinces’ rural credit cooperatives which are low in both agricultural supporting internal efficiency and external efficiency, over two-fifths provinces’ rural credit cooperatives need to be improved in agricultural supporting efficiency either internally or externally, and just over one-fourth provinces’ rural credit cooperatives are relatively satisfactory in both agricultural supporting internal efficiency and external efficiency.(3) The internal factors and the external financial environment factors restrict the efficiency of rural credit cooperatives’ agricultural supporting. It should coordinate the planning, take measures simultaneously and concern internally and externally to improve the efficiency of rural credit cooperatives’ agricultural supporting. From the internal perspective of the rural credit cooperatives, the internal efficiency improvements benefit from adhering to the belief of servicing "Three Agricultural Problems", improving corporate governance structure, expanding the scale of assets, and innovating financial service products. From the external financial ecological perspective, optimizing policy environment, increasing fixed assets investment, guiding human capital investment in rural areas, improving the cultural environment, perfecting the legal system of cooperation finance, promoting rural credit system, fostering competitive rural financial markets, and developing agricultural insurance are all in favor of agricultural supporting efficiency improvements.(4) Although wide gaps exist among rural credit cooperatives’agricultural supporting efficiency in different areas, there is a convergence trend to a certain degree. It is better for rural credit cooperatives in different areas to implement different modes of agricultural support in order to adapt to the needs of the local rural economic development, and to carry out exchanges and cooperation in order to increase agricultural supporting efficiency.The innovation of this study mainly touches upon the following aspects:(1) It decomposes rural credit cooperatives’agricultural supporting efficiency into internal one and external one. And the agricultural supporting efficiency is measured from two aspects, first, internal, the amounts and coverage of agricultural supporting loans, second, external, the actual effect of agricultural supporting loans. It evaluates the whole process of the rural credit cooperative agricultural supporting efficiency more clearly, so as to contribute to the transformation of rural credit cooperatives in agricultural support from extensive support to intensive support.(2) Using undesired output DEA model, the article estimates rural credit cooperatives’agricultural supporting internal efficiency considering the undesired output of non-performing loans. Using modified three-stage DEA model, it estimates rural credit cooperatives’ agricultural supporting external efficiency removal of the impact factors of environmental. On the one hand, high rate of non-performing loans of rural credit cooperatives due to the historical burden, and the undesired output DEA model can estimate rural credit cooperatives agricultural supporting internal efficiency considering the undesired output of non-performing loans. On the other hand, the agricultural supporting external efficiency is greatly influenced by the financial ecological environment, modified three-stage DEA model can remove external environmental factors and the random errors which can influence the efficiency of rural credit cooperatives agricultural supporting, so rural credit cooperative agricultural supporting external efficiency can be reflected more truly.(3) The study explores the structural characteristics and convergence trends of China’s rural credit cooperatives’ agricultural supporting efficiency and widens the field and scope of the existing research. The previous researches were mostly concentrated in rural credit cooperatives’ operating efficiency, reforming efficiency, cost efficiency, or credit efficiency, and they were mainly focused on rural credit cooperatives of partial regions or provinces. There has almost been no research about national inter-provincial rural credit cooperatives’ agricultural supporting efficiency and regional differences. In view of China’s rural credit cooperatives’ function positioning of service agriculture, farmer and rural area, and the characteristic of heterogeneity of the rural economic development, in this study, China’s provincial rural credit cooperatives’ agricultural supporting efficiency and its regional differences were taken as research priorities, in order to make supplement and the improvement to existing researches.