Research Into The Credit Operation In Agriculture Production

By linking credit to the provision of technical advice and by tieing credit to the subsequent sale of produce, Credit operation in agriculture is a process in which dragon enterprise intermediary larger farmer as creditor firstly advance input such as fertilizer seed breeder to farmer, then the farmer as debtor utilize it for production , It is therefore establish an interlinked mechanism by which return is divided according to the agreement and production risk is shared by two side.The primary purpose of the paper is to probe into the reason why interlinked credit could be established between dragon enterprise and farmer in the process of agriculture integration and to analyze its advantage and disadvantage as an operation mechanism in the contract farming. Furthermore we study what its impact to both side and what its success factor are.. Finally the conclusion are drown that credit arrangement in the contract farming is essential element to its success.. Consequently we point out that the research threw some light on how will rural financial providers serve farmer on better terms and how the capital of alleviation poor could be used circle effectively. In this paper we first analyze the background of the credit operation and consider it an evitable phenomenal in the development of contract fanning. Facing the combination of agriculture integration and little farmer, we should overcome the key constraints to lending to farmers due to imperfect rural financial market. By studying, the theory relate to the credit operation, we point out it in nature is form of credit and it can saving transaction cost to both side., then classifying the case of credit of domestic and foreign country and illuminating it. In the middle section of this paper we discussed the causes of credit in agriculture, especially analyzing and evaluating institutionally a form of credit operation -bread credit ,then summing up the mechanisms and guarantees of credit operation and molding its price strategy . Lastly we draw on the conclusion that credit operation deserve to utilize at the beginning of the agriculture integration and it can urge financial establishment to take part in and can improve the efficiency of capital of alleviating poor.