A Study On The Effect Of Formal Financial Credit On Farmers’ Purchase Of Agricultural Machinery

In the context of rural revitalization,how to realize farmers’ income,agricultural efficiency and rural prosperity is a research proposition with great practical significance.With the continuous urbanization and industrialization in China,a large number of rural laborers have flocked to the cities to work,and the small-scale,fine-grained and loose mode of farmland operation can no longer meet the needs of China’s economic development.At the same time,a large number of laborers of the right age have flocked to cities to engage in non-agricultural employment,and the rural labor force is facing the current situation of aging and maternal and child.As agriculture is an industry that requires high physical strength of workers,agricultural production and operation is facing the double pressure of declining quality and quantity.The popularization of agricultural machinery and equipment not only plays an important role in alleviating labor shortage and reducing the workload of left-behind laborers,but also improves the efficiency of agricultural production.Farmers’ own farm machinery purchase and use can effectively promote the improvement of China’s agricultural mechanization level and the synergistic development of agricultural production,however,farmers’ machinery purchase is very easy to be constrained by credit fund constraints,and is in urgent need of external financial resources to effectively resolve,so how to use formal financial credit policy to effectively release the kinetic energy of agricultural mechanization production is of great practical significance to achieve farmers’ income,agricultural efficiency and rural prosperity.Based on social capital theory,farmland property rights theory and scale management theory,this paper verifies the relationship between formal financial credit availability and farmers’ investment in farm machinery assets using a mediated moderating effect model and a moderated mediating effect model based on field survey data of farming households in three cities in Shandong Province in 2020.At the same time,farmers’ inflow to farmland is included in the theoretical framework of formal financial credit availability affecting farmers’ investment in farm machinery,and the possible transmission mechanism of "formal financial credit-inflow to farmland-farmers’ investment in farm machinery assets" is explored.In addition,the paper also considers the possible differential effects of farmers’ social capital and the purchase of socialized farm machinery services on the relationship between these three factors.The main findings of this paper are as follows:(1)Compared with other productive investment behaviors of farmers,farmers’ one-time investment in farm machinery acquisition is large and the investment return period is long,and the ability to realize is easily constrained,which is in urgent need of effective solution of external financial resources.Compared with informal financial credit,formal financial credit has the comparative advantages of sound procedures,high loan amount,low interest rate and safety and legality,which can effectively alleviate the financial constraints of farming households in purchasing farm machinery and enhance the willingness and ability of farming households to invest in their own farm machinery.(2)The small-scale and fragmented traditional farmland operation mode is difficult to adapt to the needs of China’s agricultural development transformation,and farmland scale operation has become an important direction of China’s agricultural development transformation,and the scale concentration of farmland further provides an important prerequisite and guarantee for the compound operation and joint operation of agricultural machinery and equipment.The boosting effect of formal financial credit on farmers’ agricultural machinery and equipment acquisition is mainly realized through the inflow of farmers’ farmland to transmit the effect,that is,the inflow of farmland plays a partly intermediary role in the process of formal financial credit boosting farmers’ own agricultural machinery investment(the intermediary effect is 0.37,with a contribution of39.44%).(3)Farmers with abundant social capital are more likely to be informed of the advantages and disadvantages of agricultural scale operations as well as information and opportunities to engage in non-farm employment,and are more inclined to engage in non-farm employment rather than agricultural production and operation based on expected returns.The quality and convenience of socialized agricultural machinery services can also smooth the pre-production,production and post-production process,and under the constraints of insufficient expected returns and low credit availability,farmers prefer to purchase socialized agricultural machinery services directly instead of purchasing agricultural machinery.That is,farmers’ social capital and socialized farm machinery services play a negative moderating role in farmers’ access to formal credit support to invest in farm machinery and equipment.