Deputy Director of the Department of Finance of the Ministry of Agriculture: Using Fiscal Measures as a Lever to Spur Agricultural Development

China Securities Journal Online (Cub Reporter Jin Jiajie) China's modern agricultural development faces a new situation. “Previously, small amounts of financial subsidies were used to support agriculture; now fiscal measures should be used as a lever to mobilize the financial sector's participation.” Guo Hongyu, Deputy Director of the Department of Finance of the Ministry of Agriculture, summarized at the sub-forum of the 2015 Agricultural Informatization Summit Forum held on the 8th the work the Ministry of Agriculture did this year in using fiscal means to mobilize rural finance, including establishing and improving the agricultural credit guarantee system and carrying out pilot innovation projects for financial support of agricultural products.

First, establish and improve the agricultural credit guarantee system. In July this year, the Ministry of Finance and the Ministry of Agriculture jointly issued the Guiding Opinions on Fiscal Support for Establishing an Agricultural Credit Guarantee System. The Ministry of Agriculture allocated a total of more than 23 billion to support the whole country in using three years to establish agricultural credit guarantee institutions. This year's target is to establish provincial-level guarantee institutions, and a guarantee alliance is also being launched, providing guarantee assistance in financing for new types of agricultural business entities in China.

Second, pilot innovation projects for financial support of agricultural products, including financial pilots in modern agriculture demonstration zones. This year, the Ministry of Agriculture carried out in Shanghai an innovative loan project for new types of business entities called “Internet finance + brand pledge.” Guo Hongyu introduced that the project has three major features. First, it uses an enterprise's intangible assets and brand, after evaluation, as loan collateral. Second, it establishes a credit service platform for new types of economic entities in Shanghai, making up for the lack of credit reporting functions for agricultural business entities in public information platforms. At the same time, it also sets a threshold for brand pledge loans. Third, it forms a linkage mechanism between financial support and edible agricultural products, so that the credit situation of agricultural product quality and safety can be used as a credit reference basis for applying for bank loans.

⟦NL> Regarding the prospects for cooperation between internet financial institutions and agricultural departments in the future, Guo Hongyu proposed several major directions. First, internet financial institutions and agricultural departments should exchange information, and the Ministry of Agriculture can also provide information such as industrial policy planning and the progress of modern agriculture reform pilots. Second, jointly develop financial products that meet farmers' needs. Third, join forces to provide targeted guidance and services. For projects recommended by agricultural departments to internet financial institutions, follow-up tracking, coaching, and services should be carried out in a targeted manner.