Three departments including the central bank: encourage financial institutions to innovate financial products and service methods to explore the “agricultural insurance+financing” model

The Zhitong Finance App learned that on December 26, the General Office of the People's Bank of China, the General Office of the Ministry of Agriculture and Rural Affairs, and the General Office of the General Administration of Financial Supervision jointly issued the “Notice on Promoting Agricultural Facilities and Live Mortgage Financing for Livestock and Poultry”. The “Notice” suggests that we should attach great importance to agricultural facilities and live livestock and poultry mortgage financing, focus on agricultural facilities with high investment value and strong demonstration driving effects, and live livestock and poultry with clear ownership to carry out mortgage financing, gradually establish a standardized management system, and improve risk prevention and mitigation mechanisms. Encourage financial institutions to innovate financial products and service methods, explore the “agricultural insurance+financing” model, make good use of credit market service platforms, and strengthen information sharing and financing matchmaking services.

Encourage standardized registration and inquiries through the People's Bank of China Credit Reporting Center's unified registration and publicity system for movable property financing. Support regions that are in a position to do so to build a digital management platform for agricultural facilities and live livestock and poultry mortgages, and give collateral assets an exclusive “QR code”. Establish and improve credit risk sharing and monitoring mechanisms, explore innovative guarantee service paths, expand insurance coverage, and support the strengthening of encumbered asset management through intelligent means such as IoT platforms.

The original text is as follows:

The General Office of the People's Bank of China, the General Office of the Ministry of Agriculture and Rural Affairs, and the General Office of the General Administration of Financial Supervision jointly issued the “Notice on Promoting Agricultural Facilities and Live Mortgage Financing for Livestock and Poultry”

Recently, the General Office of the People's Bank of China, the General Office of the Ministry of Agriculture and Rural Affairs, and the General Office of the General Administration of Financial Supervision jointly issued the “Notice on Promoting Agricultural Livestock and Livestock Facilities and Live Mortgage Financing” (hereinafter referred to as the “Notice”) in order to thoroughly implement the spirit of the 20th National Congress and the 20th Plenary Session of the Central Committee, thoroughly study and use the “10 Million Project” experience, innovate investment and financing mechanisms for rural revitalization, broaden the scope of agricultural and rural collateral collateral, revitalize rural resources, and help promote comprehensive rural revitalization.

The “Notice” suggests that we should attach great importance to agricultural facilities and live livestock and poultry mortgage financing, focus on agricultural facilities with high investment value and strong demonstration driving effects, and live livestock and poultry with clear ownership to carry out mortgage financing, gradually establish a standardized management system, and improve risk prevention and mitigation mechanisms. Standardize agricultural facilities and live livestock and poultry registration, establish and improve work processes such as declaration, investigation, verification, and publicity, and promote the application of digital technology such as electronic ear tags and biometrics. Scientifically evaluate the living value of agricultural facilities and livestock and poultry, and encourage places in a position to do so to establish supporting management systems such as evaluation agencies and staffing.

The “Notice” emphasizes the need to improve agricultural facilities and live livestock and poultry mortgage registration models, establish a list of collateral lists according to local conditions, and encourage standardized registration and inquiries through the People's Bank of China's Credit Reporting Center's unified registration and publicity system for movable property financing. Support regions that are in a position to do so to build a digital management platform for agricultural facilities and live livestock and poultry mortgages, and give collateral assets an exclusive “QR code”. Encourage financial institutions to innovate financial products and service methods, explore the “agricultural insurance+financing” model, make good use of credit market service platforms, and strengthen information sharing and financing matchmaking services. Establish and improve credit risk sharing and monitoring mechanisms, explore innovative guarantee service paths, expand insurance coverage, and support the strengthening of encumbered asset management through intelligent means such as IoT platforms.

The “Notice” requires that collateral disposal mechanisms should be continuously improved, the establishment of a multi-level networked rural property rights trading platform should be improved, rural property rights transfer transactions should be improved, the acquisition and disposal of bad assets using agricultural facilities as collateral should be standardized, and disposal channels should be broadened. Strengthen policy incentives and financing support services, make comprehensive use of monetary, credit and other policies, and encourage and guide financial institutions to expand investment in agricultural facilities and live livestock and poultry mortgages. Further promote the pilot interest rate discount project for agricultural construction loans with modern facilities, and strengthen financial incentives and support. All units should actively publicize agricultural facilities and live mortgage financing policies for livestock and poultry, and create a favorable public opinion environment.

In the next step, the People's Bank of China will strengthen coordination and cooperation with the Ministry of Agriculture and Rural Affairs, the General Administration of Financial Supervision and other departments, summarize the typical experiences and practices of various regions and financial institutions in a timely manner, continuously improve the support and guarantee system, and ensure that agricultural facilities and live livestock and poultry mortgage financing are promoted actively, steadily, in a standardized and orderly manner.

General Office of the People's Bank of China General Office of the Ministry of Agriculture and Rural Affairs General Office of the General Administration of Financial Supervision

Notice on Promoting Agricultural Facilities and Livestock and Poultry Mortgage Financing

In order to thoroughly implement the spirit of the 20th National Congress and the Second, Third, and Fourth Plenums of the 20th CPC Central Committee, and in accordance with the requirements of the “Opinions of the CPC Central Committee and the State Council on Further Deepening Rural Reform and Firmly Promoting Comprehensive Rural Revitalization”, the People's Bank of China, the Ministry of Agriculture and Rural Affairs, and the General Administration of Financial Supervision decided to promote agricultural facilities and live livestock and poultry collateral financing, further improve management systems, innovate service mechanisms, promote the revitalization of rural resource elements, and guide the expansion of effective investment to meet the multi-level and diversified financing needs of agricultural operators. The relevant requirements are hereby notified as follows.

1. Attach great importance to agricultural facilities and live mortgage financing for livestock and poultry

(1) Fully understand the importance. Agricultural facilities and live livestock and poultry are important assets for agricultural operators, and there is huge room for value development. Promoting agricultural facilities and live mortgage financing for livestock and poultry helps revitalize rural property rights resources and broaden the scope of rural financing collateral. It is of great significance in improving the availability and convenience of financing for agricultural operators and promoting the modernization of agriculture and rural areas.

(2) Highlight business promotion priorities. All regions should focus on the six major modern facility construction projects proposed in the “National Modern Facility Agriculture Construction Plan (2023-2030)”, focus on agricultural facilities with high investment value, strong demonstration driving effects, and live livestock and poultry, give priority to regions such as the periphery of large and medium-sized cities, facility agricultural agglomeration areas, and large and medium-sized agricultural enterprises to carry out agricultural facilities and livestock and poultry live mortgage financing, gradually establish standardized management systems, improve financing products and services, improve risk prevention and mitigation mechanisms, and guide leveraging financial resources Increase investment in social capital to help the comprehensive revitalization of the countryside.

II. Standardize the registration of agricultural facilities and live livestock and poultry

(3) Improve the registration system for agricultural facility rights. Local agricultural and rural departments should work with relevant departments to formulate agricultural facility registration management measures in line with local reality, establish and improve work processes such as declaration, investigation, verification, and publicity, etc., and apply for ownership registration and filing for agricultural facilities with clear ownership of agricultural facilities, project plans and land use that meet management requirements, and have a certain scale and high value, and issue property rights certificates in accordance with the law.

(4) Promote differentiated authorization methods for livestock and poultry. Local agricultural and rural departments should actively promote the application of digital technology such as electronic ear tags and biometrics, and explore differentiated authorization methods such as electronic dynamic files and digital identifiers based on the different biological characteristics of live livestock and poultry, so as to achieve accuracy and traceability of the authorization process.

(5) Improve the level of authorization registration services. Encourage places that are in a position to do so to set up certification and review windows to improve the level of agricultural facilities and live livestock and poultry registration services. Give full play to the important role of rural grass-roots organizations in registration, declaration, certification, etc., and motivate the peasant masses to participate.

III. Scientific evaluation of agricultural facilities and the living value of livestock and poultry

(6) Explore the construction of a value evaluation system. Financial institutions can draw on asset value evaluation experience such as commercial real estate, land assets, industrial plants, etc., or rely on third-party professional agencies to explore and comprehensively adopt methods such as market price method, cost method, or income method through big data modeling and analysis based on multi-dimensional information such as purchase and sale contracts, transaction notes, tax certificates, agricultural subsidies, and historical transaction average prices to construct a standardized value evaluation system that conforms to the characteristics of agricultural facilities and live livestock and poultry production and use.

(7) Establish a supporting management system for value evaluation. Places that are in a position to do so are encouraged to explore the establishment of supporting management systems for agricultural facilities and evaluation agencies, such as the qualifications and personnel of live livestock and poultry. Local agricultural and rural departments should provide necessary information data and industrial policy support, strengthen cooperation with various industry associations, professional societies and third-party service agencies, and provide effective support for the reasonable valuation of agricultural facilities and live livestock and poultry.

IV. Improve agricultural facilities and livestock and poultry live mortgage registration models

(8) Establish a list of collateral lists. Local agricultural and rural departments organize and draw up recommended lists of agricultural facilities and live livestock and poultry collateral, and clarify the types of facilities, biological assets, construction scale, production standards, and market value ranges that can be used as collateral in the region according to local conditions. Financial institutions include eligible agricultural facilities and live livestock and poultry on the list of collateral according to their own business development and risk control capabilities.

(9) Implement mortgage registration publicity and pre-loan review requirements. The borrower submits a loan application to a financial institution and is responsible for the authenticity, completeness and legality of the information provided. To carry out agricultural facilities and live livestock and poultry mortgage business, financial institutions should thoroughly and meticulously conduct pre-loan due diligence, encourage standardized registration and inquiries through the People's Bank of China Credit Reporting Center's unified registration and publicity system, and accurately publicize mortgage information, so that collateral can be checked and repeated collateral is prevented. Places that are in a position to do so are supported to issue other warrants. Mortgage certificates are only used to handle financing-related matters and are not used as a basis for other uses.

(10) Innovate asset collateral models. Encourage regions that are in a position to do so to build digital management platforms for agricultural facilities and live livestock and poultry collateral, give collateral assets an exclusive “QR code”, gradually implement “one shed, one code” and “batch coding” management for live livestock and poultry assets, explore connections with digital integrated platforms in the field of rural revitalization, and establish multi-party linkage mechanisms for industry guidance, financial services, and asset transactions to ensure clear, safe and effective ownership of collateral assets.

5. Innovative financial products and service methods

(11) Innovative financial products. Encourage financial institutions to create agricultural facilities and live livestock and poultry mortgage financing products according to local conditions. Explore supply chain finance models to provide services such as accounts receivable pledge loans and order financing for upstream and downstream small and medium-sized farmers and cooperatives around leading enterprises in facility agriculture. Give full play to the role of agricultural insurance products and service links, encourage financial institutions to effectively use the comprehensive situation of agricultural insurance in credit evaluation and risk management models, and explore the “agricultural insurance+financing” model.

(12) Improve the quality and efficiency of financial services. Financial institutions are encouraged to issue medium- to long-term loans based on agricultural facilities and live livestock and poultry collateral. Financial institutions can, according to actual needs, intervene in the early stages of agricultural facility projects, design and improve investment and financing plans and guarantee structures, optimize debt service methods, and ensure that the remaining value of the collateral matches the loan balance throughout the loan cycle. Make good use of platforms such as credit market service platforms, direct credit service for agricultural operators, and agricultural and rural infrastructure financing project banks to strengthen information sharing and financing docking services.

(13) Expand diversified financing channels. Eligible financial institutions are encouraged to issue “three rural” special financial bonds. Support financial leasing companies to use modern agricultural facilities and productive biological assets such as live livestock and poultry that meet the requirements as suitable leases, and actively explore innovative models such as bank rent linkage.

6. Establish and improve credit risk sharing and monitoring mechanisms

(14) Enhance risk protection capabilities. Effectively play the role of the national agricultural credit guarantee system, explore innovative guarantee service paths, and implement service models such as “Guarantee+Industrial Chain” and “Guarantee+Digitalization”. Improve facility agriculture and livestock and poultry live insurance policies, innovate insurance products, expand insurance coverage, and reduce production risks for operators. Encourage insurance companies to scientifically and reasonably determine insurance premiums for agricultural facilities and live livestock and poultry in custody.

(15) Strengthen post-loan monitoring and management. Financial institutions should track and monitor borrowers' production and operation, changes in collateral value, etc., and take effective measures to prevent and control credit risks. If circumstances such as circulation, sale, damage, or depreciation of agricultural facilities and live livestock and poultry are discovered during the loan period, the borrower may be required to provide additional guarantees or take relevant protective measures.

(16) Strengthen the management of encumbered assets. Local agricultural and rural departments should actively assist financial institutions to pay close attention to the quality of agricultural facilities and live livestock and poultry assets in custody, and urge breeding entities to submit plans to release mortgaged live livestock and poultry to financial institutions for the record in advance. Support the application of modern information technology and enhance the ability to accurately manage and control encumbered assets through intelligent means such as IoT platforms, electronic fencing, biometrics, and blockchain.

7. Continuously improve collateral disposal mechanisms

(17) Improve rural property rights transfer transactions. Actively explore the establishment of a rural property rights trading platform with multi-level networks in provinces, cities, counties and townships to enhance rural asset mobility within the region. Local rural property rights trading institutions are encouraged to give priority to auction processing. Explore a “pre-trade” model for agricultural facilities and live livestock and poultry, and encourage rural property rights trading institutions to sign circulation or transaction agreements with farmers and financial institutions. In the event of loan default, rural property rights trading institutions can auction collateral assets, and the proceeds generated can be used as a priority to repay loan principal and interest.

(18) Broaden disposal and monetization channels. Encourage financial asset management companies, local asset management companies, etc. to standardize the acquisition and disposal of bad assets using agricultural facilities as collateral. Support capable agricultural investment, agricultural reclamation and other enterprises to use market-based means to carry out agricultural facility collateral asset storage, contract leasing, etc., promote powerful rural collective economic organizations to establish back-up and repurchase mechanisms for agricultural facilities and live livestock and poultry collateral assets, and speed up the circulation, transaction, disposal and monetization of agricultural facilities. Regions in a position to do so are encouraged to strengthen cooperation with financial institutions, establish databases around verified collateral information, assessed value, collateral status, etc., and provide comprehensive services such as information inquiry, supply and demand docking, and transaction matching.

8. Strengthen policy incentives and financing support services

(19) Strengthen support for monetary and credit policy instruments. Make comprehensive use of monetary, credit and other policies to encourage and guide financial institutions to expand investment in agricultural facilities and live livestock and poultry mortgages. Provide differentiated credit policy support to financial institutions with strong investment, good operating results, and strong sustainability.

(20) Strengthen financial incentives and support. Further promote the pilot interest rate discount project for agricultural construction loans with modern facilities. Encourage places that are in a position to do so to set up loan risk compensation funds to pay compensation for agricultural facilities and live livestock and poultry mortgages that have defaulted according to the agreed sharing ratio. Priority and support are given to regions where efforts to promote agricultural facilities and live livestock and poultry mortgages have achieved good results in relevant funding project arrangements.

9. Strengthen organizational implementation and promotion

(21) Improve the support and guarantee system. Branches of the People's Bank of China, agriculture, rural areas, and financial supervisory authorities in various regions have strengthened coordination, promotion, supervision and management, carried out regular dispatch services, promptly detected and resolved blockage issues, continuously improved support and guarantee systems, and ensured that agricultural facilities and live livestock and poultry mortgage financing progressed actively, steadily, in a standardized and orderly manner.

(22) Strengthen publicity and demonstration. All units should actively publicize agricultural facilities and live livestock and poultry mortgage financing policies through media such as television, radio, and the Internet, so as to create a favorable public opinion environment and working atmosphere. Summarize and summarize the advanced experiences and practices of various regions and financial institutions in a timely manner, and relevant departments will select typical model cases every year to publicize and promote them.

This article was selected from the official website of the “People's Bank of China”. Zhitong Finance Editor: Jiang Yuanhua.