The Influnce Of Rural Property Mortgage Financing On Farmers’ Income

Rural property mortgage financing which as an innovative products of rural financialsystem reform is designed to fully excavate and make use of the financing function of farmers’most important asset-the rights of the contracted management of land, the rural housingproperty and the forest property to obtain loans from financial institutions as collateral,Shifting assets to capital. This way to financing can effectively solve the problem like"adverse selection" and "moral hazard" caused by information asymmetry, alleviate thecontradiction between the growing demand of money and the reducing supply of ruralfinancial system, create favorable conditions for farmers to finance smoothly. However, somescholars consider that the rural property mortgage financing must be restricted as it has thepotential possibility to harm the social stability and destruction the project of land use. Thispaper tries to analysis the influence of rural property mortgage financing on farmers’ incometo explain the necessity of the implementation of rural property rights mortgage financingfrom the aspect of the actual effect of the increasing farmers’ income.Firstly, this paper outlines the theoretical basis including the rural financial developmenttheory, the theory of rural property rights and guarantee theory, then summarize the generationand evolution of the rural property mortgage finance from the legal background and policybackground. Secondly, this paper adopts the normative analysis to illustrate the mechanismof action of the growing farmers’ income promoted by the rural property rights mortgagefinancing, through the transmission mechanism of intermediate factors, following theexplanation of the supply and demand current situation of farmers’ financing in China and thetheory of financing dilemma. Finally, according to the262survey data collected in7-82012in Tongxin of Ningxia province and Gaoling of Shannxi province, this paper uses DID modelto calculate the growth difference of per capita net income, per capita agricultural income andnon-agricultural income between the household who has participated or not, and then conductthe significant test. Further more, this paper using the fixed effects model to empirical analysis the influence of rural property mortgage financing on farmers’ per capita net income,per capita agricultural income and non-agricultural income in consider of other controlvariables, the results showed that:rural property rights mortgage financing has significant positive influence on per capitanet income,per capita net income of agriculture and non-agricultural, however, it has littleeffect on the income structure of the surveyed area in the short term; Taking the otherinfluencing factors into consideration, on the first, the degree of education and cultivated landarea have significant positive effects on the per capita net income, on the other hand, familypopulation and agricultural labor force ratio have significant negative effects on the per capitanet income, on the second, the age of farmers and cultivated land area have significantpositive effects on per capita net income of agriculture, while family population has asignificant negative effect on per capita agricultural income, on the third, the degree ofeducation has a significant positive effect on per capitaincome of non-agricultural, while theage of farmers and agricultural labor force ratio have a significant negative impact on percapita income of non-agricultural.Finally, this paper gives the policy suggestions from fiveaspects about the issues including whether the corresponding laws and regulations should befurther relaxed, whether the pilot range should be gradually expanded and how to strengthenthe financing function of rural property rights mortgage financing.