A Research On Chinese Fiscal Policy On The Development Of Micro-credit To Farmers

It is very difficult for Chinese farmers to get micro-credit in the rural areas. The problem has seriously affected the stable development of agriculture, the farmers' income improvement and the process of building new countryside. Because the household is the basic form of production unit in China, it is very important to make the farmers to get credit from financial firms under the support from fiscal policy. It is very meaningful to do some research on this topic.As the main financial firms to lend micro-credit to farmers, rural credit cooperatives are difficult to develop under the heavy historical burden. Until today, the government continues to control the rural credit cooperatives'interest rate on deposit and loan, so these financial firms can not generate profits from micro-credit to farmers. Because of this two kinds of reasons, rural credit cooperatives have no ability and incentive for this business. Because of high-risk, low-return characteristics of farmers' micro-credit, the commercial micro-credit organizations are also reluctant to develop this business. So the supply of farmers' micro-credit is very short in China. From the experience of other countries, fiscal policy is crucial to help solve this difficult problem. Considering the specific conditions in China, we need the following fiscal policy. On the one hand, it is necessary to use fiscal policy to get rid of rural credit cooperative historical burden, to improve the asset quality and to strengthen the sustainable development. By the way of reducing tax on micro-credit and give subsidiary to rural credit cooperatives, fiscal policy can play an important role to attract the commercial micro-credit organizations to develop this kind of business. On the other hand, we must use fiscal policy to set up agricultural insurance and guarantor system to lower the probability of default, and so the financial firms can get profit from micro-credit business.Based on China's farmers micro-credit development of a comprehensive analysis of the situation, and against the existing financial difficulties from the standpoint of the policy responses, I hope that the study of micro-credit difficult to resolve the problem have some practical value and theoretical value, also hope that the study pay a role of a guide, then leads to more in-depth study.