Agricultrural Credit In Jiangsu: Mechanism And Efficiency

In recent years, Jiangsu's GDP has been growing with high speed. Jiangsu's GDP in 2007 was 2556.01 billion Yuan, which was 14.8% percent higher than the year before. Agricultural GDP was 172.61 billion Yuan, which was 4.0% percent higher than the last year. Agriculture has contributed enormously to other industries as a highly important sector in the overall Jiangsu economy. Agricultural growth leans upon capital investment, technology and agricultural policies. Capital investment plays an important role in the development of agriculture. Credit of financial institutions has been one of the most important sources of agriculture investment. Theoretically, agricultural credit that is allocated for either short term operational capital or long term investment will accelerate the gross production of agriculture. The more the agricultural credit is, the more growth agriculture will enjoy. That is to say, there are positive relations between agricultural credit and agricultural GDP. This paper intends to analyze these problems with empirical approach.Can agricultural credit effectively promote the agricultural GDP in Jiangsu? What are the long term and short term relations between agricultural credit and agricultural GDP in Jiangsu? This paper intends to analyze these problems with empirical approach. Through the analysis of Jiangsu's agricultural credit market mechanism and efficiency and the main factors that restrict the development of it, we can provides policy reference for Jiangsu's cultivating agricultural credit market and enhancing its efficiency.The conclusion was that, there are co-integration relations between agricultural credit and agricultural GDP and there are long term equilibrium relations between agricultural credit and agricultural GDP. The results above provide empirical evidence for Jiangsu to implement agricultural credit policies to promote the growth of agriculture. Increasing agricultural credit of financial institutions could enhance agricultural growth. The long term elasticity of agricultural credit on agricultural GDP is 27%, which states that agricultural credit has distinct effects on agricultural GDP. The conclusion of the analysis of the main factors that restrict the development of agricultural credit was that there needs more work to do for the rural finance market to improve the efficiency of agricultural credit of Jiangsu. To boost agricultural growth, it is extraordinary necessary to increase agricultural credit and to implement agricultural credit polices fairly. The suggestions of enlarging the effect were speeding up the rural finance reform step, improving the rural credit environment, the enlarge of government support, and simultaneously speeding up the agricultural industrialization advancement.