Research On Supply Chain Finance To Solve The Problem Of Agricultural Financing Difficulties

The reasons for the problem of agricultural financing in China are complex,but they are mainly reflected in the following aspects.First of all,agriculture is a weak industry,facing natural risks and market risks,the risks of agricultural production are high.Banks are hard to identify low-risk farmers.Commercial banks intend to reduce the repayment payment risk by setting uniform interest rates,witch makes low-risk farmers withdraw from the credit market because the higher loan cost.The agricultural credit market tends to be the "lemon market".Then,the information asymmetry between farmers and the commercial banks cause problems of adverse selection and moral hazard,and the resulting high audit cost,high implementation cost and high post-loan supervision cost,making commercial bank lending in the rural credit market a high-risk and low-yielding operation.Commercial Banks are reluctant to loan to farmers.Finally,Due to the incompleteness of the Chinese market mechanism,defects in property rights system and imperfect legal system,agriculture has not established a good credit foundation.Because of the small scale,low output and fragmented of the agricultural production,farmers are lack of effective pawn.It is won't work that farmers solve the problem of rural credit market failure by providing a variety of guarantee.Farmers are difficult to get loans in formal financial institutions.Agriculture has various problems in the credit market,but there are also advantages that other industries do not have.On the one hand,the rural areas are tribal forms of gathering grounds established by geographical and kinship.The rural society is a highly acquainted society because the frequent transactions between farmers and agricultural enterprises,and the traditional morality is highly restrictive.On the other hand,Because of the narrow range of transactions of rural product,and the high probability of repeated transactions between farmers,farmers know each other well,which make reputation information spreads quickly,and farmers have high default costs.How to establish a new type of credit mechanism based on the existing environment and transaction characteristics of farmers,with insufficient collateral of farmers and information asymmetry between farmers.The credit mechanism can effectively prevent farmers from opportunistic behavior,and effectively controlling the credit risk of banks is the key to solving the problem of agricultural financing.Under these circumstances,this paper proposes a new type of financing method suitable for farmers to get loans,witch is agricultural supply chain finance.Agricultural supply chain finance refers to a new financing program that in a superior and special agricultural product supply chain,the leading enterprises as core enterprises,binds the enterprises and farmers of its upstream and downstream to improve the stickiness of transactions among individuals.Through solving the problem of information asymmetry between farmers and banks,and establishing a new type of dynamic credit mechanism,enables farmers to obtain financing solutions from formal financial institutions.The characteristics of this supply chain finance: First,the peasant households and agricultural enterprises on the supply chain have the function of self-selection and horizontal supervision,alleviating the problem of information asymmetry between banks and individual enterprises;second,the network chain structure can increase the stickiness of cooperation among individuals.Commercial banks can control the cash flow of the transaction through embedding the supply chain,instead to control the future cash flow of the effective guaranty.The supply chain finance builds a dynamic credit mechanism.At present,the study of supply chain finance mainly focus on the case analysis.Most of scholars focus on the supply chain finance model not the feasibility of inner mechanism.Based on the absorption and summarizes of the existing related research results at home and abroad,this paper expounds the feasibility of supply chain finance agricultural finance to solve the problem of agricultural financing,from the angle of a new type of dynamic credit mechanism,combined with case analysis.The first chapter of this paper mainly discusses the purpose,significance,research methods,innovation and deficiency of the research,then gives a comprehensive description of the supply chain finance and the use of the supply chain finance in agriculture;The second chapter mainly discusses the financing situation and difficulties of agriculture in China;The third chapter describes the structure and characteristics of agricultural supply chain finance;The fourth chapter is the core part of the article,through the Bayes equation and Game theory expounds why farmers are difficult to finance in traditional credit market,and financial supply chain how to make farmers get loans in the formal financial institutions through solving information asymmetry and credit lack problem.The fifth chapter takes coffee industry in Dehong,Yunnan Province,as an example.Through the case analysis,elaborates again the operation mode and process of supply chain finance to solve the financing difficulties of farmers;The sixth chapter summarizes the full text and puts forward the research prospects.