Research On Financial Support To Agricultural Industrialization

Agricultural industrialization is an important part in the development of China's rural economy, and also an effective way for China to adjust the agricultural structure and increase the income of peasants. However, because of the lack of historical accumulation, capital shortage has become an obstacle to the development of agricultural industrialization. Based on Financial Functional Paradigms, financial support for agricultural industrialization should mainly contains financial support and risk management support. At present China's rural financial system are lacking in two areas:risk management system is imperfect, and in lack of tools to transfer and decentralizing risk; Risk concentration becomes the key problem in agriculture-related financial services, and financial support for agricultural industrialization is in a serious shortage of supply both in direct finance and indirect finance. The situation thereby restricts the deepening of the agricultural industrialization.This paper delves the causes of difficulties in financing in the development of agricultural industrialization, and gets the conclusion that the issue is rooted in the contradiction between high-risk agriculture and financial profit-driven nature. The existing supply of rural financial system can not meet the needs of agricultural industrialization, which demonstrates a supply-side financial repression. Therefore, the building of a multi-level financial support system for agricultural industrialization, is preferably through three fronts:first, build a financing system, including multi-level organizational system, and rich variety of tools; second, achieve risk management function through credit guarantees, agricultural insurance, and derivatives market; third, this paper further elaborated the operation of "bank-insurance interaction" mechanism, and deemed the mechanism as a breakthrough for resolving risk concentration in financing system of China's agricultural industrialization. Therefore, this paper designed corresponding "bank-insurance interaction" modes for different types of agricultural industrialization, trying to solve the financing issues of agricultural industrialization by model innovation. At the end, the paper makes a number of policy recommendations for completing the financial support system for agricultural industrialization, including improving the supply of diversified financing system, dredging channels for risk diversification, and innovating "bank-insurance interaction" mechanism based on local conditions, etc.