Government Subsidy,Competitive And Financial Support Agriculture

Credit is an important breakthrough in solving three issues of agriculture,the countryside and farmers in developing countries.In order to improve the credit availability,China's market-oriented reforms introduce competition mechanism making the rural financial market gradually from the monopoly to the competition.The "independent management,self-financing" characteristics of rural financial institutions are gradually clear and make themselves pursue more profit.But at the same time the rural financial institutions may be deviated from the agricultural target,resulting in rural credit funding gap.In order to make up for the gap of rural credit funds,China carried out government support policies including monetary,credit,fiscal and other aspects,guiding rural financial institutions actively invest in agriculture loans.On the perspective of competitive,rural financial institutions pay more attention to profitability and risk control and the rural market situation is more complicated.It is the key that the government support policy can play the expected effect,have a positive impact on the county financial market performance,and guide the long-term effective support of rural financial institutions.Based on the theoretical analysis of the impact of government subsidies on credit support for rural financial institutions,this paper constructs a panel model based on the data of county and rural cooperative financial institutions in northern Jiangsu Province,and analyzes the impact of government subsidies on credit support for rural financial institutions This paper takes the rural cooperative financial institution as an example,and makes a theoretical and empirical analysis on the behavior of the financial subsidy of the financial institutions from the micro perspective,so as to provide further policy suggestions for the formulation of the rural financial credit support policy.The main research contents and conclusions include the following two parts:First,from the theoretical aspect,on the one hand government subsidies reduce the cost of rural financial institutions to expand the supply of loans,on the other hand reduce the borrower's costs to stimulate the effective credit needs of rural areas.The number of loans to enterprises and farmers are increased and the change in loan prices need to compare the supply and demand changes,if the increase in the supply of rural financial institutions is greater than the effective demand in rural areas,the loan prices decline;on the contrary,then the loan prices rise.From the results of empirical test,the trend of agriculture loan changes shows that although the different subsidies to promote agricultural effect is different,but the overall government subsidies promote the breadth of loans,reduce the loan price,and the depth of loans to agriculture is limited.The government subsidies pull rural customers from non-lenders to financial customers.Affected by market competition,rural financial institutions for the sake of economies of scale will try to increase the amount of units and reduce the bank's information costs of each loan.Loans show centralized and large-scale trend.At the same time,compare the farmer and rural enterprise loan market,government subsidies promote the breadth of farmer loans and market competition promotes the depth of farmer loans.In the rural enterprise loan market,market competition and government subsidies promote the breadth and depth of rural enterprise loans.The difference between the farmer and the enterprise loan reflects the internal stratification of the rural loan market.Second,in order to explain the difference between the two types of loan markets,this paper analyzes the credit allocation behavior of rural financial institutions from a micro perspective.From the results of theoretical analysis,based on the difference between risk and cost,the number of loans of rural enterprise is better than that of farmer loans,and the increase of corporate loans is larger than that of farmer loans.From the results of the empirical test,first of all,small subsidies for poverty alleviation due to the limited number of farmers involved,the depth of the promotion of farmers is limited.Second,the incremental incentives for agriculture loans are more direct than those of small-scale poverty alleviation and subsidized agriculture loans,which are directly related to the income of rural cooperative financial institutions.The incentive funds are directly transferred to rural cooperative financial institutions and have incentives for financial institutions to issue agricultural loans.Finally,farmers lack the necessary collateral and income is instability,while enterprise loans quality is higher,loans are larger and loan costs are relatively low.The rural cooperative financial institutions gradually change from the monopoly position to the competition,and with the relaxation of the market interest rate,the rural cooperative financial institutions are more autonomous to the loan prices,and the rural cooperative financial institutions will gradually tend to benefit from the low cost and high profit of enterprise loans.In summary,the conclusions are as follows:market competition and government subsidies generally reduce the price of agriculture loans.Government subsidies promote the breadth of loans,but improving the depth of loans especially farmer loans is limited.Competitive complement the subsidies and improve the depth of agriculture loans.At the same time,farmer and enterprise loans are all agriculture loans,the government is difficult to carry out effective credit allocation,based on the different risks and costs,rural cooperative financial institutions are more willing to allocate incremental loans to rural enterprise loans.It formats rural credit resources in different borrower market.According to the conclusion,the internal allocation of loans depends on the micro-behavior of financial institutions.It can not just rely on the role of government,but need to cooperate with the competition mechanism.Therefore,the government needs to play a guiding role actively and attach great importance to rural financial institutions and credit support in the reform of design and policy incentives.The government should establish risk insurance system to make up for the high risk of farmer loans;at the same time,It can play the role of the market,relying on market forces to invest and configure credit resources.