Research On The Operating Mechanism Of Mutual Aid Funds For Poverty Alleviation In Dingxi City

Currently,there are little motivation and enthusiasm for financial institutions to make contributions to 'Issues of Agriculture,Rural Areas and Farmers' and to serve poor farmers.This issue is caused by multiple reasons.Firstly,rural credit has the disadvantages of limited amount of investment,low profits,long approval process and dominant policy restrictions.Secondly,agricultural production has a relatively high risk.Thirdly,there exist serious credit defaults.Fourthly,individual farmers cannot provide sufficient mortgages and guarantees.The service function of various financial institutions and commercial banks in rural areas has been weakened,as a result,the credit demands of farmers,especially poor farmers,are far from being met.The financial supply in rural areas has deficiencies in both quantity and structure,which makes it difficult to provide strong support for the development of rural industries and for the elimination of poverty.In order to solve this problem,taking advantage of the model of poverty alleviation by international and domestic non-governmental organizations,the State Council Office for Poverty Alleviation and the Ministry of Finance jointly launched a pilot project of 'Mutual Aid Fund for Poor Villages'(MAFPV)in 2006.This fund has been developed through the experience of community funds,which enables that this special fund for poverty alleviation could be used in accordance with the real needs of farmer in poor areas.Besides,this fund is a sustainable development fund for production with the characteristics of self-government,self-maintenance and self-increment.This innovational poverty alleviation system aims to match the public provision and the need of poor farmers,consequently forming a 'hematopoietic poverty alleviation model'.By this way,it can ensure special funds for poverty alleviation targeted on poor people and poor areas.Meanwhile,it can also improve the abilities of the poor in self-accumulation,organization and development.As a typical underdeveloped province in western China,Gansu Province suffers from general poverty as the main feature of its backward economic status.Fund is a key factor that restricts the economic and social development at poor areas,and that hinders the poverty reduction.Therefore,the government considers the promotion and development of mutual aid funds as an important measure to alleviate the shortage of funds for poor farmers to get out of poverty at rural areas,aiming to break the poverty cycle.The government thus is paying more attention to the foundation and development of cooperatives on mutual aid funds.MAFPV is a special poverty alleviation method for special groups at special time.It plays a positive role in many aspects.To be specifically,it solves the difficulties in development funds for poor farmers,increases the endogenous driving force for poverty alleviation,promotes industrial development and enriches villages and their residents as well.Besides,the rural credit environment has been improved and a harmonious rural area has been well formed.However,there are also some problems about the government and development of mutual aid funds,which need to be improved.Cooperatives on mutual aid funds lack clear legal status,and are facing with serious external disturbances.The mechanism of selecting poor people is inconsistent with the actual participation.Some relevant personnel are not qualified and low motivated,and in some cases the project cannot be operated sustainably.Taking Dingxi city of Gansu province as an example,this paper systematically summarizes and analyzes the implementation,development and potential difficulties of MAFPV since the year of 2006.The policy of increasing guarantee credit for MAFPV in Dingxi city as well as the cooperative on MAFPV at Weiyuan country of Dingxi city are introduced.Then a typical and representative case of mutual aid village called Caijiaping village located at Maquan township of Zhang county,is discussed concerning the government and development of MAFPV.The theory of“Common-pool Resources" is used to analyze the problems occurring during implementation of MAFPV,possible reasons to the problems and its potential consequences.Based on the theory,a comprehensive framework on government of MAFPV is constructed,in order to propose adaptable policies for development and reliable references for decision-making.The present study benefits for regular and healthy implementation of MAFPV,which will promote the rapid development of modern agriculture and accelerate the progress of poverty alleviation.Additionally,future works on MAFPV are also discussed in this paper.