BEIJING (Reuters) – Chinese regulators on Tuesday stepped up efforts to finance the modernisation of farms and widen the range of collateral to back bank loans to the agricultural sector to include rights to the use of some communal land.
Qualified agricultural firms are encouraged to issue bonds and list on bourses such as the tech-heavy STAR market, a statement jointly released by the People’s Bank of China (PBOC) and five other government departments said on Tuesday.
Regulators will also explore pilot programmes to allow some agricultural businesses and villages to pledge their rights to use some categories of communally-owned land as well as farmland to apply for loans.
Beijing has repeatedly vowed to support rural revitalisation and modernisation, with both set as this year’s rural work priorities.
But financial support for the sector by commercial banks and insurers has been slow as lenders typically require more valuable collateral and expectations of stable business returns.
“New agricultural business such as family-operated farms, farmer cooperatives have gradually become important forces to ensure stable income growth for farmers,” the statement said.
Continued financial support for farmers and villages in new agricultural businesses also helps to consolidate the country’s poverty-relief efforts, it added.
China has invested 1.6 trillion yuan ($250.22 billion) in fighting poverty over the last eight years, state media reported in February, lifting 100 million people out of poverty.
“The central bank will work together with other government bodies and the financial system to enhance the accessibility, coverage, and convenience of financial services offered to new agricultural businesses,” the statement said.
($1 = 6.3944 Chinese yuan renminbi)
Reporting by Cheng Leng and Ryan Woo; editing by Barbara Lewis