Research On Formal Credit Constraints Of Grain Management Farmers

The issue of "agriculture,rural areas and farmers" is the focus of China’s economic development and has received widespread attention from the state.However,rural areas are generally facing a shortage of funds and the serious credit constraint problem is hindering the development of the rural economy.Therefore,in order to solve the financing difficulties of farmers,it is necessary to study how to alleviate the phenomenon of credit constraints in rural areas.China’s rural credit market is characterized by the coexistence of formal and informal credit,but with the development and transformation of the rural economy and society,formal financial institutions have become the main channel for farmers to solve their financial shortage problems.Therefore,this paper constructs a mechanism for identifying and classifying formal credit constraints based on data from 429 grain management farmers in Jiangsu province,measures the degree of formal credit constraints of farmers in general,under different farming areas and at different income levels based on the Heckman three-stage model,compares and analyses the formal credit constraints of farmers with different characteristics,and studies the influencing factors of farmers’ formal credit accessibility and formal credit constraints.And the PSM model is used to explore the effect of formal credit constraints on farmers’ agricultural income,non-agricultural income and total income.The results of the study show that grain management farmers are subject to both demand-based and supply-based credit constraints,with an overall credit constraint level of 59.23%,and that the degree of formal credit constraint for farmers decreases continuously as total income increases,with a U-shaped trend in relation to the area of cultivated land.The higher the education level of the grain management farmers,the greater the family support ratio,the more qualified they are to grow food,the more they join a cooperative,the more developed the economy of the township where they are located,and the less likely they are to be constrained by formal credit.The formal credit constraints reduce farmers’ agricultural income by RMB 33,599.76 and increase non-agricultural income by RMB 10,399.17,resulting in the total income reduction of RMB 23,200.59.Finally,countermeasures to alleviate the formal credit constraint of farmers are proposed from the perspectives of farmers,financial institutions and the government in response to the findings of the study.