What financial support policies are there for agriculture? The head of the Ministry of Agriculture answers reporters' questions
Recently, the Ministry of Agriculture issued the "Notice on Promoting Financial Support for and Service to the Development of Modern Agriculture", making a systematic deployment for promoting financial support for agriculture by agricultural departments at all levels. This is the first guiding document on financial support for agriculture issued by the Ministry of Agriculture. What important significance does promoting financial support for agriculture in the new era have? What are the focal points for using fiscal funds to leverage financial capital? What roles should agricultural departments play? Around these questions, Li Jianhua, Director of the Department of Finance of the Ministry of Agriculture, gave an exclusive interview to a reporter.
Reporter: Why vigorously promote financial support for agriculture? What important significance does it have, and what major opportunities are faced this year?
Answer: Since the 16th National Congress of the Communist Party of China, the central government finance, in accordance with the principles of giving more and taking less, letting things loosen up and stay flexible, industry nurturing agriculture, and cities supporting rural areas, has continuously increased agricultural subsidies, expanded subsidy coverage, and raised subsidy standards, gradually forming an agricultural subsidy policy system with Chinese characteristics. This has played an important role in achieving “ten consecutive increases” in grain production and “ten consecutive years of rapid growth” in farmers' income. However, with the acceleration of agricultural modernization, large-scale growers, family farms, cooperatives, and other scaled and intensive new agricultural operating entities have developed rapidly, and the characteristics of commercialized production and industrialized operation have become increasingly prominent. Whether for fixed asset investment or working capital needs, agricultural and rural economic development has become more dependent on financial capital. The long-standing difficult issue of rural finance has reached the point where it must be solved. Premier Li Keqiang once clearly pointed out that “strengthening financial support for ‘agriculture, rural areas, and farmers’ is of great significance for strengthening food security, building modern agriculture, increasing farmers' income, and narrowing the urban-rural gap.” In my understanding, financial policy can not only amplify the effect of fiscal funds and better meet the capital needs of modern agricultural development, but more importantly, unlike simple direct fiscal subsidies, using financial capital to support agricultural production is conducive to market-oriented operation and farmers' independent choice, promotes farmers' awareness of the market, risk, and credit, stimulates the internal vitality of agricultural operating entities, and enhances market competitiveness. At the same time, it can also reduce direct government intervention, clarify the relationship between the government and the market, and better balance fairness and efficiency.
However, the channel between rural financial supply and demand is still not smooth, and the financial needs of agricultural and rural economic development have not yet been effectively met. This has become one of the most prominent contradictions in the field of rural finance and one of the most important factors restricting the development of modern agriculture. Through efforts, it should be said that the current microcredit system for rural households is still relatively sound, and the financing channels for relatively large leading enterprises in agricultural industrialization are also relatively smooth. The most prominent problem is the rapidly developing new agricultural operating entities. On the one hand, their loan demand is very common and their individual scale is relatively large; on the other hand, they generally lack collateral recognized by banks. “Difficult access to loans” has become the development problem they mention most. In our surveys in Hunan, Chongqing, Guizhou, and other places, farmers often reported that direct fiscal subsidies cannot solve the huge capital needs of scaled production. One cooperative chairman even said, “I would rather give up a 100,000 yuan free subsidy and hope instead that help can be provided to solve a 1 million yuan loan.” According to statistics, China currently has more than 2.7 million specialized large growers with an operating scale of more than 100 mu, 877,000 family farms of various types, more than 950,000 farmers' cooperatives, and more than 300,000 agricultural industrialization operating organizations. Therefore, smoothing the channel between agricultural financial supply and demand, solving “difficult access to loans,” and meeting the capital needs of modern agricultural construction have become important tasks before us.
At present, we have encountered a major opportunity to solve this problem. In the first half of the year, the State Council held a national teleconference on the exchange of experience in rural financial services, and the General Office of the State Council issued several opinions on financial services for the development of “agriculture, rural areas, and farmers,” showing that the central government attaches great importance to financial support for agriculture.
Relevant financial management departments and financial institutions have all actively promoted financial support for agriculture. I believe that modern agriculture needs financial support, and at the same time, the rapid development of modern agriculture has also cultivated effective demand for rural finance and provided a huge potential market for rural financial development. Therefore, modern agriculture and the financial service industry should achieve mutual benefit and win-win results.
Reporter: What problems should financial support for agriculture focus on solving, and on which targets and fields does it focus?
Answer: Financial support for agriculture involves all aspects of agricultural and rural economic work and should be steadily advanced in stages and with key priorities. At present and for some time to come, agricultural departments at all levels should closely focus on the central task of ensuring the effective supply of grain and other important agricultural products and the sustained and relatively rapid growth of farmers' income, aim to accelerate the building of modern agriculture and promote sustainable agricultural development, focus on solving the financial service problems in agricultural production, especially the “difficult and expensive access to loans” of new agricultural operating entities, and continuously improve the level of financial guarantee for modern agricultural construction.
Specifically, the main focus is on the growing financial service needs of new agricultural operating entities such as specialized large growers, family farms, farmers' cooperatives, and leading enterprises in agricultural industrialization, and efforts should be made to increase financial support for working capital and infrastructure investment; focus on the financial service needs of the scaled, intensive, and industrialized development of agricultural production, and actively seek to increase financial support for high-standard farmland construction, high-yield creation for grain, cotton, oil, and sugar, standardized production of horticultural crops and livestock and aquatic products, production of improved seeds for planting and breeding, agricultural product processing, as well as agricultural scientific and technological innovation, agricultural machinery equipment manufacturing, protected agriculture, and modern agriculture demonstration zones; focus on the financial service needs of agricultural production and circulation services, and actively seek to increase financial support for agricultural production services, market information, warehousing and logistics, and agricultural product purchasing.
Reporter: Why is it said that effectively achieving financial support for agriculture cannot be separated from the guidance of fiscal funds? What models are there for fiscal funds to leverage financial support for agriculture, and in which areas will this year's innovative pilots mainly be concentrated?
Answer: In the agricultural support and protection policy system, fiscal and financial policies have a significant synergistic effect. Only when fiscal support policies for agriculture amplify their effect through financial leverage can they meet the capital needs of modern agricultural development; only when finance in the agricultural field receives fiscal support can it achieve effective risk control and reasonable cost compensation and be transformed into a real financial force supporting agricultural development. It can be said that rural finance cannot be separated from fiscal support. This is determined by the realities of China's rural areas and the characteristics of agriculture. Over the past decade, the central government finance has launched and implemented a number of projects such as direct subsidies and direct investment subsidies, providing strong support for agricultural and rural economic development, but some policies have also shown diminishing effects and low returns. At this time, it is necessary to innovate the methods of fiscal support for agriculture, use fiscal funds to leverage financial capital, and improve the efficiency of fiscal fund use. In recent years, various localities have actively explored this and formed several models for fiscal funds to leverage financial support for agriculture: First, guarantee subsidies. By supporting or directly establishing guarantee institutions, weaving an agricultural credit guarantee network, and providing guarantees for eligible agricultural credit needs, mainly to help solve farmers' “difficult access to loans” problem. Second, loan interest subsidies. By using fiscal funds to subsidize interest on eligible agricultural loans, mainly to solve the “expensive loans” problem. Third, agricultural insurance. Fiscal funds subsidize premiums for agricultural insurance against natural disasters, diseases, and other risks, mainly to solve the “high risk” problem in agriculture. Fourth, expense rewards and subsidies. Through fiscal and tax policies, compensate financial institutions for the business costs of issuing agricultural credit under certain conditions and provide certain risk compensation, mainly to solve the “unwilling to lend” problem. Fifth, investment funds. Fiscal funds participate in contributing capital to establish funds and adopt equity investment methods to guide social capital toward enterprises that conform to the direction of modern agricultural development, mainly to solve the problem of agricultural enterprises' investment “weak strength.”
This year, the central government finance will continue to promote the implementation of policies such as premium subsidies for agricultural insurance, targeted fee subsidies for rural financial institutions, and incremental rewards for county-level financial institutions' agriculture-related loans. At the same time, with the support of the Ministry of Finance, the Ministry of Agriculture plans to carry out pilot explorations of policy innovation in which fiscal policy promotes financial support for agriculture in some fields and some regions, promoting the realization of a “two-wheel drive” of fiscal support for agriculture and financial support for agriculture. These mainly include: First, a pilot for loan interest subsidies for beef and mutton production. In four major livestock provinces, Hebei, Shandong, Henan, and Sichuan, based on actual conditions, methods such as risk compensation, credit guarantees, and loan interest subsidies will be adopted to guide financial institutions to support scaled beef and mutton production. Second, a pilot for agricultural machinery financial leasing. We selected two major agricultural machinery operation bottleneck links, large sugarcane harvesters in Guangxi and large cotton pickers in Xinjiang, to carry out financial leasing pilots, with appropriate interest subsidies from the central government finance. Third, in Jiangsu, Liaoning, Hebei, Jiangxi, and other places, one city or county will be selected in each to carry out pilots for farmers' cooperative credit cooperation and support pilots for mortgage loans on land contractual management rights.
Reporter: In the work of financial support for agriculture, what roles should agricultural departments at all levels play?
Answer: In the work of financial support for agriculture, agricultural departments should position themselves to give play to their organizational, technical, and information advantages, should make a difference, and should actively coordinate and cooperate with departments such as finance, financial services, and insurance, refine specific measures for financial support for agriculture, promote the introduction of fiscal, monetary, and tax policies conducive to the supply of financial support for agriculture, and effectively implement various policies and measures for financial services for the development of “agriculture, rural areas, and farmers.” Work should be done well in two main aspects: First, offer suggestions. Financial support for agriculture should be taken as an important measure to promote agricultural production development and a new growth point of policies to strengthen agriculture, benefit farmers, and enrich farmers. In-depth investigation and research should be carried out, the financial needs and policy suggestions for building modern agriculture should be put forward in a timely manner, and policies and measures to promote financial support for agriculture should be promoted. Second, build platforms. Establish smooth coordination and communication working mechanisms with financial management departments, strengthen cooperation with various banks, insurance companies, and other financial service institutions, and where conditions permit, sign cooperation framework agreements with financial institutions, establish a database of high-quality agricultural industry projects, recommend them to financial institutions in a timely manner, and build a platform for communication and cooperation between agricultural operating entities and financial institutions. Of course, to promote financial support for agriculture, agricultural departments at all levels must deeply understand the important significance of financial support for agriculture work, change concepts, innovate ideas, and strengthen financial awareness. In practical work, they must also actively cooperate with relevant departments to investigate and deal with illegal fundraising activities carried out in the name of farmers' cooperative credit cooperation, agricultural project financing, and so on, and prevent rural financial risks.