The Study Of The Rice Value Chain Financing

Rice is the largest crop in China, with the largest amount of acreage and planting population. Promote the development of the rice-growing industry has a key role in increasing farmers’income and achieving the industrialization of agriculture. Although rice-growing supported by policy of payments, rice industry financing is difficulty. These difficulties mainly due to the information asymmetry and the resulting credit rationing. Firstly, financing demand-side scale smaller and lack of guaranty; secondly, information is dispersed and the collection cost high, which are increasing the adverse selection and moral hazard, leading to financial institutions reluctant to provide loans. To solve this problem, we introduce value chain financing, which with remarkable practice in international. This model should be inspection the whole value chain first, and then choose the high value-added, low-risk business invest as the starting point. The financing supply-side will continue to investment another member of the chain if the chain is in good condition. So this let the whole value chain has adequate capital supply. Value is the core in value chain financing. Value chain financing extends the limited traditional credit mortgage articles. This solves the problem of rice financing demand-side guaranty shortage. Value chain financing rely on the whole value chain, so the contact of the member in the chain and finance members with financial institutions are strengthened. And the information capacity expansion, collection cost reduction. A third party involved to supervision in the value chain finance business reduce the regulatory costs add the information transmission channels and reduce information asymmetry effectively, thereby alleviate some degree of the credit rationing problem.Chuzhou located in the country’s main rice-growing areas and it is a major rice producer in Anhui, the rice value chain finance practices in the region shows that the theoretical advantages can be achieved. There was a survey of the capital shortage about rice growers and rice processing enterprises in this region.And we found that, in the traditional financial, most of these investigations have the problem of funds. It also found that financing behavior in the value chain increase the capital flows, promote enterprise development and farmers’production. Unfortunately, the value chain finance is just on the first stage, because the value chain is short and scope limited. And the value chain finance performance of the finical institutions is not enough.In view of the advantages and practical feasibility of the value chain financing, to promote the value chain finance, government should be improving the financial markets and financial system in rural areas, increasing the constraints of relevant laws and regulations. Financial institutions should be carrying out more financing activities of the value chain finance.