New agricultural business entities need focused support from new finance
On October 15, Tao Huaiying, Director of the Department of Finance of the Ministry of Agriculture, emphasized in a keynote speech at the 2016 China New Finance Summit Forum held in Beijing that, on how to fully leverage the advantages of new finance to drive progress at one point and stimulate wider development in rural areas and promote the realization of financial inclusion, he put forward the following suggestions.
New finance should focus on new agricultural business entities
Farmers are the largest social group in our country, and their financial services have long been extremely lacking, even almost blank in some rural areas. In a certain sense, whether effective or inclusive financial services can be obtained is an important aspect of reflecting social fairness.
"We want to promote rural areas and farmers in escaping poverty and achieving prosperity, and the prosperity and development of rural areas, and realize the grand goal of building a moderately prosperous society in all respects by 2020. I think we urgently need the driving force of finance," Tao Huaiying believes.
Tao Huaiying said that with the continuous advancement of agricultural scale and intensification, new agricultural business entities have an increasingly urgent demand for finance, expanding more and more toward long-term, large-amount, and centralized financial services, and extending toward comprehensive services such as insurance, futures, and securities.
"From the composition of our country's agricultural production and operation entities, in the middle of the pyramid are new business entities engaged in appropriately scaled agricultural operations. At present, this number is roughly, including major large households, family farms, and cooperatives, called new business entities; large households are 5.5 million." Tao Huaiying said so. "There is also a trend now: migrant workers returning home to start businesses and college students returning home to start businesses total 4.5 million. These represent a new trend in our modern agricultural development, namely a new and emerging force. They can bring modern agricultural technology, production methods, and business concepts to rural areas and introduce them into agriculture. These business entities are a particularly good, high-growth, or particularly good new force driving our modern agricultural development."
However, due to multiple reasons such as our lack of effective mortgage guarantees, finance has become a bottleneck in their development, and it can also be said to be the weakest link in current rural financial services. Therefore, we have also called for this in many ways and offer suggestions to everyone. We hope that far-sighted new finance should base itself on the premise of comprehensive and equal social development, focus on and serve these new business entities, serve the broad masses of farmers in rural areas, provide tailor-made personalized financial services for them, establish long-term mutually beneficial cooperative relationships, promote the development and growth of our new business entities, achieve win-win results, and thereby also accelerate the development of our country's modern agriculture.
New finance should aim at the main battlefield of rural reform
In addition, Tao Huaiying stated that with the continuous deepening of our country's rural land system reform and the continuous deepening of reform of the rural collective property rights system, the property rights of a large amount of non-resource assets in rural areas have been further clarified. At present, the nationwide effort to advance the registration and confirmation of rural contracted land rights is being vigorously promoted, and 650 million mu have now been registered and confirmed.
Tao Huaiying disclosed that this year the central government's fiscal subsidy funds are 6 billion yuan to promote this matter and further advance the registration and confirmation of land contract management rights. At the same time, reform of share rights in collective operating assets is also being promoted, and the Ministry of Agriculture is also carrying out pilot projects and advancing it.
Tao Huaiying said that through the continuous deepening of a series of rural reforms, the continuous reform and improvement of the resources of collective land assets and farmers' property rights, the protection system for farmers' property rights will also be further improved. Giving full play to the role of market mechanisms and revitalizing and making good use of these resources also requires the participation of finance. Therefore, financial enterprises should actively participate in rural reform, open up rural markets, practice boldly, actively innovate, jointly help rural financial development, and share the huge dividends released by rural reform.
Finance must participate in the construction of the rural credit system
Tao Huaiying emphasized that, generally speaking, in our country's rural financial rating and credit reporting work, generally speaking in our country's rural areas, the credit reporting system work is still relatively weak in rural areas, and many places are still blank. There has long been serious information asymmetry between financial institutions and farmers.
The reality is that financial institutions often have money but dare not lend, and have energy but nowhere to use it. Now, through internet big data, we can see that farmers' production activities, transaction behaviors, credit information, and so on can be recorded in a scenario-based manner. If everyone works together to accumulate these data and strengthen the sharing of information resources, it will be possible to promote the improvement of the rural credit reporting system, thereby fundamentally solving the bottleneck problem of rural finance and achieving positive interaction and win-win results.
Tao Huaiying disclosed that at present, the Ministry of Agriculture is building a direct reporting system for new business entities to carry out precise positioning and dynamic tracking of family farms, cooperatives, and other new business entities across the country. Its purpose is to establish such a direct reporting system, integrate these data into such a resource, such a network, and integrate these data together.
Through precise positioning, dynamic tracking, and point-to-point interaction from top to bottom, the system connects information such as subsidies to farmers, credit, insurance, training, operations, and production services, and integrates these data for full analysis and utilization.
"In the future, we also plan to open this system for use by market entities interested in carrying out services for agriculture, rural areas, and farmers. That is, we will build such a platform and bring together the basic data, production and operation conditions, and personal information of these new business entities, as well as financial institutions and insurance institutions interested in carrying out this service, all on such a platform for resource sharing and service matching. It is also necessary to innovate financial services for rural finance, especially for new financial entities, through such a method." Tao Huaiying said so.
Tao Huaiying stated that, judging from the characteristics of our country's agriculture and rural development, achieving effective implementation or effective matching of rural financial services still requires government policy support. At the same time, traditional basketball fiscal function policies also need further reform and improvement, innovating the methods and approaches of fiscal and financial fiscal functions. The Ministry of Agriculture is now exploring and promoting the leverage role of fiscal funds on financial capital to promote innovation in rural financial services.
"Next, we will also actively promote fiscal interest subsidies, premium subsidies, risk compensation, and other multiple methods to promote the trinity interaction of fiscal policy, financial policy, and industrial policy, so as to advance innovation in rural financial services." Tao Huaiying said.