Financial Support Of Farmers For Productive Investment

The Fifth session of the Sixteenth Central Committee of the Party and the Plan of"the Eleventh Five-Year"proposed that, building the socialist new agricultural countryside is one of the most important historical missions in the modernization process of our nation. The shortage of capital formation was the root of issues concerning"agriculture, rural areas and farmers", and only through accelerating the formation of agricultural capital, could issues concerning"agriculture, rural areas and farmers"have radical solution. Whereas the financial transfer payment is limited, the function of credit capital for the rural economic development is self-evident, under the situation that indirect financing is in dominant status in China.On the base of the previous studies, this paper selected Xinji City as a specific study object, researched from the perspective of the farmers, the agricultural unit, used the survey data about the farmers in Xinji City from the year 2001 to 2006, established a model about the relationship between credit supports and farmers'investment to make quantitative analysis, and selected a representative rural community to make thorough qualitative research. Through these analyses, this paper made specific studies on the farmers'productive investment process, revealed the specific path of the financial restricts, analyzed the inherent mechanism defects of the financial support system and brought forward some suggestions about the reconstruction of the rural financial system.In this field survey, we found another financial phenomenon which is different from the previous studies: all of the local financial institutions have emerged with a huge deposit surplus and large capital outflows. Contrasting with the side of financial supports, the financial needs of farmers are not strong, but local agricultural efficiency is not high and the degree of income increase is limited. This phenomenon shows that the local financial institutions have negative attitudes when providing financial services to the farmers, and have no consciousness to mine the underlying financial needs of the farmers. How to change the negative service concepts of financial institutions to become active investment-driven services, actively guide and promote the credit needs of farmers and encourage farmers to use new biological technology, new agricultural technology, switch to the products with more economic value, break away from the shackles of land has more important significance to narrow the gap between urban and rural areas, raise the living standards of farmers. This is alsoimportant for the improvement of the operating efficiency and ideological and operational changes of the financial institutions. Based on this, this paper brings forward some suggestions for the reconstruction of the rural financial system: establishing a diversified rural financial system, developing local small and medium-sized financial institutions, breaking the geographical restrictions on the rural credit cooperatives, exerting the effects of the commercial finance, regulate and guide the non-formal financial, establishing loan guarantee funds for farmers and strengthening the construction of rural cooperative economic organizations, developing insurance business, making land reform, etc.