Capital Market Serving Agriculture, Rural Areas and Farmers, Supporting Agricultural Merger and Reorganization

Jiang Yang, vice chairman of the China Securities Regulatory Commission, said at the China Rural Financial Development Forum recently that the CSRC will comprehensively strengthen the connection between the capital market and modern agriculture from the following four aspects: strengthening the market to serve "agriculture, rural areas and farmers", constantly increasing the supply of financial services in line with the characteristics of "agriculture, rural areas and farmers", promoting the innovation-driven development of the agricultural industry, and raising the level of futures market services for agriculture, rural areas and farmers.

Jiang Yang pointed out that China is a large agricultural country, and if agriculture is prosperous, the country will be strong. Under the new normal of economic development, the effective solution of the problems of agriculture, rural areas and farmers will further improve the potential, resilience and room for manoeuvre of economic development. We must speed up the reform and innovation of rural finance and give better play to the role of finance in promoting agriculture.

He said: promoting the organic combination of the capital market and "agriculture, rural areas and farmers" is an important work to improve the rural financial system. The capital market, which occupies the basic position of factor market, should strengthen its efforts to serve "agriculture, rural areas and farmers", promote the rational flow of urban and rural factors, and promote the development of agricultural modernization.

It is reported that in the next step, the CSRC will comprehensively strengthen the connection between the capital market and modern agriculture, and focus on doing a good job in four aspects.

First, further strengthen the capital market to serve "agriculture, rural areas and farmers". We will continue to improve the multi-level capital market system, effectively expand the field and scope of capital market services, and meet the diversified financing needs of agricultural enterprises at different levels of development and stages; in particular, we should support the standardized development of the regional equity market, encourage securities companies to gain a foothold locally and work hard, and actively provide personalized and professional services for small and micro enterprises, including agricultural enterprises. We will continue to support leading agricultural enterprises and large specialized companies, integrate upstream and downstream industrial chains through mergers and acquisitions and restructuring, further enhance the radiation capacity of leading enterprises, and improve the level of agricultural industrialization.

Second, continuously increase the supply of financial services in line with the characteristics of agriculture, rural areas and farmers. Promote securities, funds and other operating institutions to actively develop agricultural products (000061, stock bar), while further expanding the financing channels of agriculture-related enterprises, effectively meet the diversified wealth management needs of farmers. We will support futures operating institutions to improve the endogenous development mechanism, promote product reengineering and business innovation, provide comprehensive services such as cooperative hedging, pricing services and warehouse receipt services for small and medium-sized agricultural enterprises, improve their risk management capabilities, and promote the sound operation of enterprises. We will support the development of agricultural industry investment funds, agricultural private equity funds and agricultural science and technology venture capital funds, further invigorate and retain rural stock funds, attract external incremental funds such as cities, and introduce source water for the development of agriculture, rural areas and farmers.

Third, promote the innovation-driven development of agricultural industry. We should give full play to the advantages of effective docking between scientific and technological innovation and the capital market, further strengthen market infrastructure, and improve institutional arrangements conducive to the development of agricultural innovation. By standardizing the development of equity crowdfunding, enriching the varieties of bond financing for small and medium-sized enterprises, and supporting small and medium-sized enterprises to issue preferred shares, we should guide all kinds of capital into high-quality agricultural projects in an orderly manner, and promote the comprehensive docking of science and technology, creativity, capital and agriculture. We will actively support the growth of agricultural enterprises in high-tech, new business models and new economic forms.

Fourth, improve the quality and level of futures market services for agriculture, rural areas and farmers. We will further improve the listing mechanism of futures and options and improve the efficiency of agricultural product market innovation. Put refinement and refinement of listed varieties in a more prominent position, adjust the contract rule system in a timely and dynamic manner, and effectively improve the efficiency of pricing and risk management in the agricultural futures market. We will study and launch more varieties of agriculture-related futures to further expand the coverage of serving customers in the agricultural industry.

Jiang Yang said that agricultural futures options are mature and widely used tools in overseas markets. We should do a good job in the pilot work of agricultural futures options in the light of the reality of our country. We should actively give full play to the advantages of option tools, such as high efficiency in the use of funds, flexible and convenient hedging strategies, and accurate risk management, so as to form a risk management system for agricultural products that is coordinated and complementary with forward, futures and other tools. Better serve the target price reform of agricultural products.

In addition Jiang Yang said that the CSRC has always attached great importance to the service of the capital market for agriculture and rural areas and launched a series of targeted reform measures which have achieved remarkable results.

Statistics show that from 2007 to the end of March this year, there are 38 leading agricultural industrialization enterprises IPO, financing scale of 28.7 billion yuan; listed agricultural enterprises re-financing of 21.7 billion yuan. By the end of March, a total of 57 agriculture-related enterprises had raised 9.5 billion yuan in private bonds for small and medium-sized enterprises in the exchange market. From 2009 to the end of March this year, there were 17 major asset restructuring of agriculture-related listed companies, with a cumulative amount of 31.6 billion yuan.

At present, 21 varieties of agricultural products have been listed in China's futures market, and the variety system covering grain, cotton, oil and sugar has been basically formed.