Latent Class Model Of Financing Channel Of Family Farm In Shaanxi Province

The family farm is becoming more and more common in China.Family farm is family-oriented and market-oriented,which leads to larger agricultural operations,more professional production and more extensive collaboration.Financing has become an important way to invest,specifically including financial institutions and private lending.Because of a variety of subjective and objective factors,different farmers have different financing choices,and the corresponding impact coefficient will be different.The coefficient of the latent class model is not constant and can be divided into different categories for family farms,providing a way to analyze the probabilities of different farms in selecting different financing channels.The data was collected by field research,and comes to the factors that affect the financing channel.At the same time,the farmers are divided into two types: the preference to financial institution financing and the preference to private financing.And then,analyse those financing preferences respectively.According to the conclusion,some policies and suggestions are given,so that the family farm is able to get a strong financial support.Finally,family farm in Shaanxi Province would achieve a comprehensive,coordinated and sustainable development.The specific steps are divided into three steps.Firstly,it completes the theoretical research,collects information,and conducts descriptive statistics to analyze the financing status of family farms in Shaanxi province,including the personal information of farmers,the basic characteristics of family farms,their operations,the financing situation and the willingness to finance.Secondly,the theoretical analysis of the model is carried out,and the explanatory variables are determined from the data of the survey,and the empirical analysis of the latent class model is carried out.The factors related to the selection of the financing channels of the family farms in Shaanxi Province and the factors influencing the different types of farmers are obtained.Finally,according to the empirical results,the countermeasures and suggestions are provided for the selection of financing channels from the perspective of government and banks and family farms.Based on the analysis,more than 60% of the family farms were financed.It is found that the financing channels of family farms consist of farm credit cooperatives,commercial bank loans,usury loans and relatives and friends loans.The first two are loans to financial institutions,the latter two are private lending.The rural credit cooperatives were the main financing channels.The coefficient of the degree of education,the size of the family,the distance to the financial institutions are negative,and the coefficient of the age and collateral are positive.Different family farms in Shaanxi Province have different preferences for financing channels,which are divided into private financing and institutional financing.For the private financing farmers,the important factors are gender,age,the degree of education,personal experience,the average annual income.And for institutional financing farmers,the important factors are the degree of education,operating area,operating time,total investment,the average annual income and collateral.There are considerable differences in the impact of different factors on the will of the two categories,and the strongest influence on marginal willingness are gender,the proportion of labor force and collateral.The greatest contribution to the marginal willingness of private financiers are the proportion of labor force,the average annual income and the average annual cost.The greatest contribution to the marginal willingness of institutional financiers are the proportion of the labor force,the area of operation,the total investment and the collateral.Therefore,the government should improve the subsidy mechanism,improve the farmer’s knowledge reserve,and carry out the work of the household farm,the propaganda and the return visit;the financial institution perfect the service,simplify the examination and approval procedure,introduce more situable loans;family farmers could focus on learning knowledge and skills,widen the information channels.