County-level Encouragement for Microcredit to Promote Greenhouse Crop Cultivation

Recently, the local government office of Lingshui County in Hainan Province implemented a microcredit and subsidy program to improve local crop cultivation efficiency and improve the local economy. This program couples microcredit loans with government subsidies to add greenhouses onto local farm land. Studies show that crop output of common vegetables is 3 times more efficient in greenhouses than existing crop cultivation techniques and yields superior product quality. Consequently the market potential of greenhouse renovations will broaden sales opportunities for the local farmers. 

The program has been designed to incorporate group lending methodology. There is a minimum limit of 5 households in order to qualify for a loan. Consequently, all borrowing, crop cultivating and repaying of the loan is done collectively within a group. Building greenhouses on 1 mu (亩 – equivalent to 1/6 acre) of land requires RMB 20,000; the government subsidy program will subsidize RMB 8,000; the remaining RMB 12,000 is supplied by government-issued loans. In addition to the subsidy, the government will subsidize the loan interest payments for the first two years.  

Coinciding with the launch of the new agriculture-based loan program, the Lingshui County government has raised a total of RMB 214.2 million in capital to invest in greenhouse technology and crop cultivation. The total capital raised has been raised by several parties: RMB 44.5 million originates from the local county government, RMB 43.6 million from bank loans, RMB 62.1 million from the local farmers and RMB 64 million from local companies in the area. Currently, greenhouse facilities have reached 11,350 households, covering 2.6 acres of land within the county.  

Additionally, the county government aims to improve basic living standards by raising access to clean water and electricity, as well as improve road infrastructure. Moreover, as a means to ensure construction of the greenhouses remains smooth and under supervision, the Lingshui County agriculture department has trained 3,000 local residents to facilitate with farm work and construction. The team of trained laborers allows for construction to continue even during peak farming seasons, and also eases unemployment pressures among local laborers. 

Source(s): http://lingshui.hinews.cn/system/2010/12/06/011612632.shtml