Research On Formation Mechanism And Related Countermeasures Of Supply-side Financing Restraints On New-type Agricultural Management Entities

This paper is about the research on formation mechanism and related countermeasures of supplyside financing restraints on new-type agricultural management entities.Main problems to be researched: 1)what are the features of supply and demand of finance service for new-type agricultural management entities,and how is the effect of finance service on the development of new-type agricultural management entities;2)how is the effect of financing restraints on new-type agricultural management entities,and the formation mechanism of supply-side financing restraints on new-type agricultural management entities;3)Influencing factors and causes of financing restraints on newtype agricultural management entities;4)how to establish a mechanism and a mode to remove financing restraints on new-type agricultural management entities.The research idea of this paper is: Based on previous theories on supply-side financing restraints,with logic analysis,mathematics analysis and game theory analysis,a theoretical analytical framework of the supply-side financing restraints on new-type agricultural management entities is established.Then with survey and investigation,statistics and quantitative analysis,this thesis investigates the financing demand and supply as well as financing effect of sample new-type agricultural management entities.Influencing factors of supply-side financing restraints on new-type agricultural management entities are analyzed with quantitative research method and microscope survey data.At the same time,case study is carried out on typical samples of farming households,family farms,farmers' specialized cooperative and leading businesses of agriculture industrialization,thus to tap into the manifestations and causes of supply-side restraints on new-type agricultural management entities.Based on above analysis,this thesis proposes systematic mechanism,mode and policies to remove the supply-side financing restraints on new-type agricultural management entities.The main contents,conclusions and innovations of this paper are as follows:I.Main Contents1.Theoretical analytical framework for supply-side financing restraints on new-type agricultural management entities.Based on understanding of the connotations,characteristics and realization conditions of new-type agricultural management entities,with game theory analysis,the formation mechanism of supply-side financing restraints on new-type agricultural management entities,as well as the influencing mechanism of supply-side financing restraints on new-type agricultural management entities is researched deeply in this thesis.2.Status quo of financing supply for and demand of new-type agricultural management entities and financing effect The development of new-type agricultural management entities in China is firstly investigated,and then some of new-type agricultural management entities in some provinces and cities are researched specifically.Descriptive statistics are used to analyze the current situation of financing demand and satisfaction of financing demand of new-type agricultural management entities.Then,combination of gap analysis and subjective assessment is used to assess the average degree of restraints for supply-side loan faced by new-type agricultural management entities.At last,empirical analysis is carried out for the economic benefit generated from loans to new-type agricultural management entities,as well as the promotion effect of financing supply on the development of new-type agricultural management entities.3.Empirical research on influencing factors for supply-side financing restraints on new-type agricultural management entities.Supply-side financing restraints on new-type agricultural management entities and related influencing factors are investigated and analyzed empirically with microscopic survey data,thus to provide valuable empirical evidences for researching the mechanism and mode of removing supply-side financing restraints on new-type agricultural management entities.4.Case analysis of financing restraints on new-type agricultural management entities.Case studies are applied in three among each category such as family farm,big-specialized-household of crop and animal productions,specialized farmers' cooperative and agricultural enterprise to investigate the financing restraints in order to clarify specific causes of financing restraints on newtype agricultural management entities,and provide detailed empirical evidences for the research on the mechanism and mode for removing financing restraints on new-type agricultural management entities.5.Plan and mode construction of mechanism for removing restraints on financing of new-type agricultural management entities in China plus their related suggestions.Mode construction and related suggestions for removing financing restraints on new-type agricultural management entities are proposed based on design of mechanisms relating to legal system,agricultural property right confirmation,pledge trade,financial product innovation,social mutual help and risk sharing.II.Main Conclusions1.Settlement of financing restraints on new-type agricultural management entities is the key to facilitate the cultivation of new-type agricultural management entities and promoting the transformation from traditional agriculture to modern agriculture.New-type agricultural management entities are the footstones for the transformation from traditional to modern era,and inevitable links in the course of development of modern agriculture.The cultivation of new-type agricultural management entities in China is based on the household contract responsibility system with remuneration linked to output.It's a complex course to reorganize agricultural elements such as land,capital,labor force,organization,management and technologies,and reform agricultural management entities.During the course,the organizational foundation for transformation from traditional to modern agriculture will be built up.Among elements of modern agriculture,capital is the core element to promote the cultivation of new-type agricultural management entities.Only sustainable agricultural capital investment could bring other advanced agricultural elements to integrate,new-type agricultural management entities grow constantly and modern agriculture develops.Though new-type agricultural management entities appear relatively late in China,they grow fast constantly.At present,most of new-type agricultural management entities are facing financing difficulties.The financing restraints on new-type agricultural management entities have produced adverse influences on agricultural yield.Establishing a financing channel guided by diversified risk sharing mechanism is an important way to remove financing restraints on new-type agricultural management entities.2.The acquisition of bank loans of new-type agricultural management entities plays obviously positive role in overcoming the difficulty of limited funds and enabling sustainable development.Under the circumstance of new stage of development of agriculture and rural area,and the perfection of investment and financing system and continuous encouragement of national policies,there are more and more large-scale new-type agricultural management entities with higher operating level.However,the capital size and annual revenue of most of new-type agricultural management entities are small after deduction of cost and operating expense.Therefore,they have natural demand on credit financing and agricultural insurance.At present stage,the financing demand of new-type agricultural management entities in China has characteristics as follow: large fund demand,insufficient fulfillment,mainly middle and long-term loans,and diversified financing purposes.While financing behaviors feature diversified financing channels,popular mortgage loans,gradually increasing demand for agricultural insurance,and popular private lending.There are two main financing channels for new-type agricultural management entities,i.e.,internal financing and external financing.The source of internal financing is the capital accumulation of the management entities.Only when the own capital accumulation is insufficient to meet financing demand,new-type agricultural management entities would take the external financing into consideration.However,external financing can only meet a small part of financing demand of new-type agricultural management entities for normal operation.From the data of acquisition of financial capital of new-type agricultural management entities,we can find that small loan applications are easy to be approved,while large loan applications to banks require complex approval formalities and stringent conditions on the applicants due to the considerations of the banks regarding safety,liquidity and profitability.Therefore,most of new-type agricultural management entities can't get enough loans from financial institutions such as banks.More credit loan support from banks is very important for the development of new-type agricultural management entities.3.The financing situation of new-type agricultural management entities seems not optimistic.Financing restraints have severely influenced the construction and development of new agricultural system in China.The new-type agricultural management entities in China are facing with financing restraints such as onefold financing channel,difficulty to obtain loans and high financing cost.There exists a great gap between supply and demand of financial support to new-type agricultural management entities.Insufficient financial support is hindering the stable operation,growing and development of new-type agricultural management entities.The causes of restraints on new-type agricultural management entities at present can be attributed into three types,i.e.problems of the newtype agricultural management entities,of existing financial system and of governmental policies.The problems of new-type agricultural management entities,such as imbalanced development of scale and quality,limited internal financing capacity,demand of large amount and long-term loans,lack of acceptable pledges and irregular management,make them difficult to financing via financial institutions.Existing financial system in China features complex loan application process and high cost,lack of support to products and service provided by new-type agricultural management entities and missing of agricultural guarantee institution.New-type agricultural management entities face difficulties in expanding financing channel,and their financing demand is hard to be fulfilled.Regarding governmental policies and systems,there are also problems of imperfect mortgage policy for rural property right,dispersion of financial support for farmers and insufficient supervision and missing of risk sharing mechanism.These problems influence the development of agricultural credit,and bring financing difficulties to new-type agricultural management entities.4.The key to remove the financing restraints on new-type agricultural management entities is to perfect existing operating system,establish matching financing mode and further optimize policy environment.Regarding removing the restraints,it must eradicate unreasonable legal impediments.Code of conduct for clear restraints and encouragements to lenders must be established at legal level,and the rights and transaction rules for pledges must be clarified as well in order to activate fixed assets in rural areas.For the problem of unclear rural property right,we should improve systems of right confirmation and procedures,and continuously improve pledge transaction mechanism.For avoiding risks,innovation mechanism for financial products should be established with innovative credit service and product.At the same time,long-term social mutual help system should be established,thus to share risks among interested parties.With continuous improvement of these mechanisms,the restraints on new-type agricultural management entities will be solved successfully.For mode construction,in addition to traditional financial institutions like banks,cooperation among various bonding firms,insurers and affiliated firms could be established based on the principles of mutual benefit and risks sharing.For management entities which meet the requirement of traditional banks for loan release,such as possessing conventional pledges,real estate,plant and machinery which are easy to exchange for cash,and operating right of the land and agricultural facilities on the land,traditional mortgage loans could be applied.For biological assets,which have large risk and difficulty to dispose,cooperation with bonding companies and insurers is encouraged for sharing the risks and benefits.For agricultural firms producing based on orders,they can mortgage the order to bonding company that will then guarantee for them in banks.Guarantee from upstream or downstream firms in the supplier chain for financing is also a solution.For operating entities with strong financial strength and quality assets,IPO for financing is another choice,which is in line with international practices.As suggestions of policy,the role of policy as guidance in the financing process of new-type agricultural management entities must be highlighted.The time to taking effect and efficiency of the policies must be taken into consideration when developing policies.According to the characteristics of industries and operating entities,as well as areas and links,the key point of policy support must be clarified,and the advantages of related policies regarding industry,loan,finance,insurance,guarantee,financial supervision and land must be given full play,thus to further optimize policy environment of investment and financing in modern agriculture,actively remove financing difficulties of new-type agricultural management entities,and effectively promote the cultivation and development of new-type agricultural management entities.III.Main Innovations1.Innovation on academic theories.With reference of theory of game and information economy,and theory of financial restraints and financing order,and combination of actual situation in rural areas in China,a theoretical logical framework is established for financing restraints on new-type agricultural management entities in order to provide scientific theoretical basis for empirical observation and policy design.2.Innovation on methodology of argumentation.A lot of microscopic survey data are adopted in this dissertation to carry out empirical research on the influencing factors for financing restraints on new-type agricultural management entities.By analysis of the financing restraints on new-type agricultural management entities based on a great deal of cases,the problems and their roots of financing restraints on new-type agricultural management entities are clarified,thus to provide assertive evidences for mechanism plan and mode construction.3.Innovations on policies and suggestions.Targeting at the realistic demand of supply-side structural reform of agriculture and development of modern agriculture since the 18 th National Congress of the Communist Party of China,this dissertation emphasizes the guide role of policies in the financing of new-type agricultural management entities,points out the key to be supported in different areas and links,and suggests to give full advantages of related policies relating to industry,loan,finance,insurance,guarantee,financial supervision,financing and land,thus to fix the problem of financing difficulties of new-type agricultural management entities in a collaborative way.