Research On Formal Financial Support For The Farmers' Professional Cooperatives

The farmers'professional cooperatives are developing vigorously in China. It is an important way to increase farmers'income and lead the peasants to get rich. Our government is trying to promote the development of the farmers'professional cooperatives through financial support, tax incentives and financial, technology, personnel support and policy guidance for industries and so on. But lack of funding becomes an important constraint to the development of the farmers'professional cooperatives. It is a very important channel for the farmers'professional cooperatives to finance from the formal financial institutes. The thesis tries to make research on the necessity and possibility of the financing support for the farmers'professional cooperatives from the perspective of formal finance, and furthermore summarizes and evaluates the guarantee modes which is one of the core issues, hoping that the thesis will provide a theoretical basis to the formal financial access to rural financial markets, and promote the farmers'professional cooperatives'financing solution.Chapter 1 is about the basic theory on the financing of the farmers'professional cooperatives. First, the formal financial institutes and the farmers'professional cooperatives have been defined, and then the thesis discusses the principles of cooperatives, some concepts on financing and theories of the farmers'professional cooperatives in financing. Chapter 2 analyzes the necessity of the formal financial support to the farmers'professional cooperatives from four aspects:the huge funding gap for development; the weakness of self-accumulation which is led by the operating principles of cooperatives and the farmers'low income; the difficulty to obtain substantial financial subsidies which are small coverage and small amount; informal financial cooperatives can't become the main channel for financing because of high interest rates and illegal loan,and concludes that it is necessary for the formal financial institutes to give financing support to the farmers'professional cooperatives. Chapter 3 first lists a series of policies and regulations relating to financial support for the farmers'professional cooperatives issued by the State over the years, indicating the importance of the farmers'professional cooperatives. And then discusses the question from several aspects:the motivation of profit, official pressures and the opportunity of the rapid development of agriculture-related industries; the farmers' professional cooperatives are suitable carrier for formal financial institutes; the development and standardization of the farmers'professional cooperatives. And finally the conclusion is:the co-operation between formal financial institutes and the farmers'professional cooperatives is possible. Chapter 4 is the focus of the thesis. Credit risk is the major obstacle of formal financial support to the farmers' professional cooperatives. At the same time, the farmers'professional cooperatives lack effective mortgage assets. So the difficulty to guarantee becomes a very important factor. This chapter explores seven innovative guarantee modes to solve the financing difficulties of the farmers'professional cooperatives.The main innovations of this thesis are:first, the thesis discusses the financing problem of the farmers'professional cooperatives from the formal financial perspective, and comes to a conclusion that it is necessary as well as possible for the formal financial institutes to give support to the farmers'professional cooperatives; second, the thesis sums up seven types of guarantee modes which would lower financing risks of formal financial support to the farmers'professional cooperatives. The thesis explores the characteristics of different modes so fully from the aspects of the main participations, the risk of different subjects, forms of guarantee, the government's role and so on. Based on the exploration above, the thesis discusses the applicability of different modes. At the end, the thesis tries to give the applicable situation of each mode:the government offering guarantee payment mode and the banks and insurance collaboration mode are applicable to the areas where the financial strength is strong, the economy is developed, and agricultural output value accounts for a smaller proportion; the government to promote the formation of credit guarantee company mode is not applicable to strong local financial resources, it is applicable the areas where agriculture accounts for most of the GDP, such as some typical agricultural areas; cooperative guarantee mode for the members and group lending modes are suitable for the formal farmers'professional cooperatives of good reputation; leading enterprises to provide guarantee for the farmers'professional cooperatives mode applies to the farmers'professional cooperatives which have much to do with the leading enterprises; equity credit mode is suitable for the farmers' professional cooperatives that are in close co-operative joint and concentrate production, purchasing, credit as a whole.