China's Agricultural Policy Financial Development Problems,

China is a big developing agricultural country. Agriculture plays animportant role in social and economic development. Agriculturalpolicy-based finance has been the key measure for protecting agricultureand rural economy. Empirically, the effective measures for protectingagriculture are the financial investments, the importance of which lies inthe loan investment. In 1994, China's rural financial structure reforms ledto the formation of rural finance systems including agricultural policyfinance, rural commercial finance and rural cooperation, which willprovide loan to agriculture sector and support the development of ruralarea. Since the financial structure reforms, rural commercial financeintends to pursue the maximization of profit. Its range of businessdeviates from agriculture, with the loan going to other industries whereprovide higher profits. Meanwhile, agricultural policy finance has beenestablished for a short period of time, with legislation falling far behind.In addition, as the policies are inconsistent over time, businesses inpolicy finance are taken over by commercial finance. It makes the scopeof agricultural policy finance business shrinking, which seriouslyhandicapped the role of agricultural policy finance in rural economicdevelopment.How to perfect the function of agricultural policy financeorganization and fully play its credit role to support agricultural sector isa crucial question needs to be studied and resolved immediately.The aim of this paper is to analyze the fruits and question of China's agricultural policy finance, to provide the suggestion on the rationalallocation of funds and on the rural economic development. This paperanalyzes the main questions existed in China's agricultural policy-basedfinance, as well as the necessity and feasibility to reconstruct Chineseagricultural policy-based finance institution started from the presentdevelopment condition. Then put forward the feasible approach and somepolicy suggestions.This article is composed of five chapters. In chapter one, the authorclarifies the background, meaning and studying method, etc. Chapter two, introduces the concept of agricultural policy-based financial institution, analyzes the function and characteristic of it as well as its position.Chapter three, describes the characteristic of the overseas agriculturalpolicy finance. Chapter four, systematically analyzes the start anddevelopment of agricultural policy-based financial institution in ourcountry, describes its present conditions and existed questions, study thedifficulty hampered its efficiency. Then put forward some policysuggestions and feasible approach of reconstructing Chinese agriculturalpolicy-based finance in chapter five.