It is Made Clear that Private Capital Will be Encouraged to Invest in Agriculture and Rural Areas


Ministry of Agriculture and Rural Affairs of China and the National Administration for Rural Revitalization released the “Guideline on Investment of Social Capital in Agriculture and Rural Areas 2021” (referred to as “the Guideline” hereinafter), which specifies 13 key industries and areas for social capital investment in agriculture and rural areas, as well as specific measures for innovating investment methods, creating cooperation platforms and setting up a good environment. According to the Guideline, agricultural and rural departments at all levels are encouraged to select and cultivate rural revitalization projects suitable for PPP model, and give priority to supporting public welfare projects with certain benefits such as agricultural and rural infrastructure projects.


The Guideline was released at the National Webinar on Financial Services for Agriculture, Rural Areas and Farmers. Liu Huanxin, Vice Minister of Agriculture and Rural Areas, said at the webinar that finance is the source for comprehensively promoting rural revitalization based on the new development stage. To achieve the goals and tasks of agricultural and rural development in the 14th Five Year Plan requires a huge amount of capital investment. According to the situation of fighting against poverty, all types of capital invested exceeded 12 trillion yuan, of which 9.2 trillion yuan was loan granted for targeted poverty alleviation. In order to further promote the comprehensive revitalization of rural areas, we need to accelerate the formation of a diversified investment pattern with the priority of financial support, preferential focus of finance and active social participation.


The Guideline pointed out the key industries and areas to encourage investment, namely, modern planting and breeding industry, modern seed industry, live improvement of rural people, agricultural products processing and logistics industry, new service industry, ecological circular agriculture, agricultural science and technology innovation, agricultural and rural personnel training, agricultural and rural infrastructure development, smart agriculture construction, rural entrepreneurship and innovation, agricultural and agricultural technology innovation, human settlement improvement for rural environment and foreign cooperation on agriculture.


In terms of innovative input methods, the Guideline pointed out the need to innovate the PPP model. We will actively explore public welfare projects with stable returns in agriculture and rural areas, and promote the means and mechanisms for the implementation of the Public-Private Partnership (PPP) model, so as to ensure that investment by private capital is predictable, rewarding and sustainable, and that PPP can be promoted in an orderly manner in accordance with the law. We encourage agricultural and rural departments at all levels to systematically sort out agricultural investment projects in their regions in accordance with the requirements of relevant documents on PPP in agriculture, select and cultivate rural revitalization projects suitable for PPP model, and give priority to supporting agricultural and rural infrastructure construction and other public welfare projects with certain benefits. We encourage private capital to explore ways such as asset securitization and equity transfer to revitalize the stock assets of projects and diversify the channels for capital entry and withdrawal. We encourage credit and insurance institutions to step up innovation in financial products and services, and carry out pilot cases of investment and financing models such as interlink of investment and lending, and integration of investment, lending, protection and subsidies.


Source: China Financial and Economic News