A Research On The Strategy Of The Agricultural Policy Financial Support For The Agro-processing Enterprises

In the past thirty years of China’s reforms and opening up to the outside world, our country has made great achievements in resolving issues concerning agriculture, countryside and farmers boosted by central government and CCP. The economy of agriculture develops rapidly and the farmers’ income has risen considerably. However, it should be aware that the regional imbalance of agricultural economic development also exists. The backward traditional agriculture is still in majority in central and western China. In order to promote the transition from traditional agriculture to modern agriculture, the industrialization of agriculture is a necessity. As the carrier and the implementation of the industrialization of agriculture, agricultural products processing has become the most significant step. The industry of agricultural products processing can increase farmers’ chances of employment, take advantage of the rural surplus labor force and directly augment the income of farmers. What’s more, the industry of agricultural products processing is a huge drive to adjust the agricultural structure and achieve the goal of the integration of production, purchasing and sales which benefits the stable development of grain production and indirectly generates profits for farmers. Against this backdrop, in recent years, the industry agricultural products processing has experienced a vigorous development especially in some leading enterprises. However, while experiencing such a rapid development, the industry of agricultural products processing also faces lots of difficulties among which there are causes of poor management of enterprises and the external environment conditions. The difficulties in financing the industry of agricultural products processing grow obvious. The shortage of funds has become the "bottleneck" which constrains the rapid development of agro-processing enterprises. Compared with other industries, the financial demand of agro-processing enterprises is much more appealed. Due to the seasonal variations and the fierce competition of this industry, enterprises have urgent needs in marketization, standardization and scale production. As a result, agro-processing enterprises are much more in favor of fund support.As the only state-owned agricultural policy bank, Agricultural Development Bank of China (hereinafter referred to as ADBC) is responsible for resolving issues concerning agriculture, countryside and farmers and shouldering the historical mission of the construction of New Countryside. The major business of ADBC is policy-oriented as the management of the funds for purchasing grain, cotton and edible oil. Currently, in accordance with State Council’s decision, the consistently expansion of ADBC’s loan business for agricultural flagship enterprises and agriculture-related commercial businesses has vigorously backing the industrialization and enhancing the competitiveness of enterprises with considerable social influence. It is a significant measure not only in the promotion of economy especially the development of agriculture economy, but also it increase the income of farmers to raise the funds for agricultural policy businesses based on the state credibility and helps agro-processing enterprises pull through but also in bringing about an effective way to achieve the sustainable development of credit operations of policy finance. However, there are still some problems to be solved on the issue of how ADBC can play a positive role in promoting development of agriculture and rural areas in the process of agriculture industrialization and medium to agricultural and rural credit.This paper includes the following four parts, the first part describes the main theoretical foundation of agricultural products processing enterprises and agricultural industrialization theory and the policy financial support for agricultural products processing enterprises. The second part explains that ADBC has achieved enormous results through supporting the development of agro-processing enterprises. It also points out the urgent problems in the process of development and analysis are made concerning these problems. The case of company A is presented and analyzed in the third part. Achievements and problems in the process of supporting the company A by Wenjiang Agricultural Development Bank are studied. Moreover, the countermeasures are put forward in the light of the problems. The last part, on the basis of the case study and the proposition of countermeasures, elaborates on the suggestions of the parts that policy finance should play in the support of agro-processing enterprises. The innovation of this thesis may lie in the following points. Presently, most scholars focus their studies on the financing of medium-sized and small enterprises. There is barely research specific on agro-processing enterprises. This study systematically details the financial support to agro-processing enterprises of policy banking institution. Integrating theory with practice, starting from the representative agro-processing company A, this study attempts to offer corresponding strategies and suggestions ranging from the establishment of the macro financial system to the specific micro idea of credit product.To draw a conclusion, ADBC should improve the loan services and enhance the financial innovation while enterprises are supposed to promote their competitiveness and improve the level of management. At the same time, the system of financial policy support to agro-processing enterprises and the external environment should also be more perfect through the coordination and interaction with banks, enterprises and government which jointly promote the agricultural industrialization development.