Research On Risk Management Of Agriculture

The issue of "three rural areas" has always been one of the livelihood issues that the Chinese government has long been concerned about.With the increasing attention of the state to the "three rural issues",various policy support documents have been issued one after another,gradually promoting the construction of China’s agricultural financial service system,and the financial market in agriculture and rural areas is becoming more and more perfect.However,due to the characteristics of high risk and low security,the demand gap for agriculture-related loans is large and the contradiction between supply and demand is more prominent.How to effectively analyze the main risk influencing factors of agriculture-related loan business and put forward effective improvement suggestions to improve their own risk management ability of agriculture-related loan business has become an important issue that needs to be solved by the agricultural and commercial banks.This paper firstly elaborates the concept of agriculture-related loans,understands the classification and characteristics of agriculture-related loans,and examines the risk types and risk characteristics of agriculture-related loans.Subsequently,nine agricultural and commercial banks are used as the research objects to understand the development of agricultural and commercial banks in W city from various aspects of human resources and operation data.Then,this paper analyzes the risk management of agriculture-related loans in W city agricultural and commercial banks based on three major risk management aspects:pre-lending investigation,review during lending,and post-lending management,and understands the development quality of agriculture-related loans in W city agricultural and commercial banks under the current risk management model from the changes of data such as business scale,proportion,and the level of non-performing loans.At the same time,the development of agriculture-related loan business of W City Agricultural and Commercial Bank is analyzed in terms of each segment of maturity structure,guarantee structure and customer structure.Based on the Delphi method,the paper identifies and screens the main factors influencing the risk of agriculture-related loans in W.The paper also conducts an empirical analysis through a logistic model to evaluate the relationship between each risk factor and loan default behavior and the degree of influence.Finally,this paper proposes strategies to improve the risk management of agriculture-related loans in W city agricultural and commercial banks by combining the findings of the empirical analysis.In summary,although W City Agricultural and Commercial Bank has built a more systematic system of risk management system and operation process for agriculture-related loans,its stability of non-performing rate of agriculture-related loans is slightly insufficient,and the risk management ability of loan business still needs to be improved.Through empirical analysis,it can be found that there is a negative correlation between annual household income level,age,execution interest rate,security method,credit rating and loan default behavior,while there is a positive correlation between loan pattern and loan overdue behavior.In order to fully improve the risk management ability of agriculture-related loans of W City Agricultural and Commercial Bank,this paper suggests that each agricultural and commercial bank should fully improve the screening standards of credit qualifications such as the borrower’s household income level and guarantee method to enhance the quality of agriculture-related loan customers;strengthen the publicity and education activities on financial basic knowledge and the consequences of loan default to comprehensively improve the credit awareness of the "three rural" subjects;and strengthen the cooperation with insurance agencies.We should strengthen business cooperation with insurance institutions,innovate the type of insurance business applicable to various types of agriculture-related loan business,and raise customers’ awareness of risk protection.At the same time,W City Agricultural and Commercial Bank should cooperate with local village and township governments to assist farmers in improving their business income,and perform its own development function while resolutely implementing the rural revitalization strategy to reduce the chance of non-performing loans.