Beijing plans broader use of government funding, bank lending, insurance, bonds and private capital for agriculture, livestock, rural infrastructure and agricultural technology
BEIJING: China has unveiled a broad financing strategy for agriculture and rural development aimed at strengthening food security and building a more sustainable investment system by 2030, with livestock, agricultural infrastructure and technology among the areas targeted for greater access to finance.
The plan, announced on September 7, calls for agriculture and rural areas to receive greater priority in government budget allocations while increasing compensation for major grain-producing regions.
It brings together several financing channels, including fiscal support, bank credit, agricultural insurance, bonds and private investment, as Beijing seeks to improve the flow of capital into the rural economy and strengthen the country’s agricultural production capacity.
Under the plan, local governments will be allowed to use eligible proceeds from special and general bonds for rural infrastructure, industrial development and public-service projects.
Banks will also be encouraged to increase lending to major grain- and seed-producing counties, with financing directed towards grain production and supply security, rural industries, infrastructure and agricultural technology innovation.
A significant component for the livestock sector is the promotion of loans backed by agricultural assets. The measures specifically identify livestock, farm machinery, agricultural facilities and warehouse receipts as potential forms of collateral for financing.
The strategy also calls for an expansion of agricultural insurance, including full-cost and planting-income coverage for staple crops such as rice, wheat, corn and soybeans. Authorities also plan to improve loan guarantees and risk-sharing mechanisms for agricultural borrowers.
The government is seeking a larger role for private capital in rural development through specialised rural revitalisation funds and other market-based financing channels. Eligible agricultural companies will also be supported in accessing bond markets and stock listings, while infrastructure real estate investment trusts, or REITs, will be encouraged in suitable areas.
The plan further calls on rural collective organisations to make better use of land, assets and other resources, including through partnerships with businesses on projects such as renewable energy.
China’s latest financing push comes as the government seeks to modernise rural areas while maintaining food and agricultural supply security. The policy combines direct government support with market-based financing in an effort to create what authorities describe as a more sustainable and efficient investment system through 2030. The measures also include stronger oversight of rural investment projects and related funding, indicating that the expansion of financing will be accompanied by tighter management of how agricultural and rural development funds are used.
