Research On The Problems And Historical Contribution Of Rural Credit Cooperatives Towards The Agricultural Modernization

The "Three Rural Problems"(Problems about Agriculture, Rural areas and Peasantry) have become the bottleneck factors related to the social stability and the economic sustainable development of China. Both the development experience of the Agricultural economic of the world and China (in the past 60 years)show that agricultural modernization will be the only way of solving China’s "three rural problems". However, effective financial support is the prerequisite for the smooth progress of China’s agricultural modernization, so research the relationship between the main force of China’s rural finance—rural credit cooperatives and agricultural modernization is very necessary. However, the existing researches have shown that the scholars at home and abroad mainly focuses on the relationship between the finance (or rural finance) and agricultural modernization, which results in very few studies devoted to the relationship between rural credit cooperatives and agricultural modernization.Therefore, the study on the realistic problems and the historical contributions of rural credit cooperatives to support agricultural modernization would in some sense have filled this gap, and this is also the theoretical significance of this study.First of all, summaring the basic theories and the existing researches on the relationship between rural credit cooperatives and agricultural modernization, this paper does some researches on the development of rural credit cooperatives by using the combinational method of qualitative and quantitative analysis method; Secondly, based on the evaluation of the level of agricultural modernization in China by using analytic hierarchy process and the weighted method, the author makes an empirical test on the relationship between the development of China’s rural credit cooperatives and agricultural modernization; Thirdly, comparing the Rural credit cooperatives’s status for supporting agriculture in the sample County; Finally, summarizing the relevant conclusion.The main conclusions of this study include:Firstly, the longitudinal comparison of the fund that the rural credit cooperatives invested on agriculture economics shows that, the rural credit cooperatives’s deposit taking function remains strong, and prepares a great amount of moneny for the agricultural modernization. But if measuring from the efficiency of transformation from savings to investment to measure, its efficiency is gradually reduced since the 1990’s; The horizontal comparison between the rural credit cooperatives and other financial institutions shows that, the agricultural loans issued by the rural credit cooperatives accounted for most of the financial institutions, especially since 2003, this ratio remained at about 75%, which fully embodies the main position of rural credit cooperatives in agriculture development. Of course, the rural credit cooperatives’s agriculture efficiency is always higher than that of other financial institutions.Secondly, the empirical analysis results show that, in the long run, both the savings and loan efficiency improvement of rural credit cooperatives are conducive to the development of agricultural modernization, but the performance are different at different stages. Before the reform and opening-up, the rural credit cooperatives’s main function was to accumulate funds, but the capability of issuing agricultural loans was limited. Therefore, the role of supporting the agricultural modernization is limited; From the reform and opening-up to 1992 was the best development period for the rural credit cooperatives. Both its savings rate and savings-investment conversion rate are positively correlate to agricultural modernization; Since 1993, the rural credit cooperatives’s agriculture efficiency begain to decline, which caused hindering effects to agricultural modernization; However, compared with other financial institutions, its agriculture effeciency has always been higher.Thirdly, the comparison between different regions shows that, the tendency for supporting agriculture of the rural credit cooperatives in less developed areas is much stronger than that in the developed areas. But because of the single guarantee way, the risk of loans is generally higher in underdeveloped regions and results in the small-amount loan. However, these small loans little effect on modern agricultural development. While the single amount of the rural credit cooperatives’s loans in B County are larger, but the agriculture-use ratio is very low.Finally, in order to play a better role in promoting the development of agricultural modernization, we need to focus on the following questions:Firstly, we must take relevant incentive measures to enhance its support for agriculture initiative and ability in the later development process; Secondly, we must see the innovation of credit guarantee mode as an important part of the rural financial reform, through which we can reduce the credit risk, thereby reduce the agricultural loan interest rates, and lower farmer’s loan-cost; Finally, in the process of the commercialization reform, rural credit cooperatives in the Central and Western Regions must learn from the experience and lessons of the rural credit cooperatives in the Eastern regions. That is, commercial operation is just a kind of business strategy for the rural credit cooperatives, and it does not interfere with the aim of serving farmers.The innovations of this paper are as follows:Firstly, considering that the existing researches were mainly based on qualitative analysis, and the reliability of the conclusions was weakened seriously.Literature-search method, Meta-Analysis method and empirical and norm analysis method have been widely used in this study.Thereby, greatly improving the scientificity and reliability of the conclusion; Secondly, The purpose of this study is to provide suggestions for how to improve the effieieney of rural credit cooperatives support to agricultur, therefore this paper will be in line with China’s development background—trying to address the Three Rural Problems.The deficiencies of this paper are as follows:Firstly, the lack of related research results in the lack of research base for reference. Therefore, defects will inevitably exist in the relevant indicators and evaluation methods; Secondly, due to the availability of relevant data, the informal rural cooperative financial organizations have not been included in the study.