Securitization of rural land

19th century 70's, asset securitization transactions originated in the United States, and now it has become a widely adopted by countries in the world of financial innovation tools and rapid development. Land securitization of financial innovations is on top of this active capital market came into being.


First, asset securitization and securitization of the basic meaning of the Land

The so-called asset securitization (asset securitization), refers to financial institutions, non-standard loan assets would be pooled to form a collection of assets, and then broken down into standardized set of assets in securities that can be transferred assets. Its most prominent feature is the had a lack of liquidity (or less liquid assets through the integration or restructuring converted into the same amount of revenue the same period and the same financial instruments, so in the financial markets can be traded freely.

Land is the lack of liquidity in the market economy, the scarcity of Economic resources, but people that the land is suitable for asset securitization. Japanese economist You Noguchi male in his book Discipline <"Land Economics>> that:" land securities is to land (or land rent) to get the benefits, as security (collateral) issuance of securities, and then sell these securities. "In China, rural land contracting system as the premise, some scholars of the Land Securities defined as: the issuance of securities as collateral of land revenue, loss of land rights is not the premise, the use of the function of securities markets, will not move, difficult to divide, not suitable for small-scale investments can flow into the land of financial assets or interpreted as the right to contract land, or land contract revenue can be transformed into marketable capital market and financial products to the process of circulation.

Thus, the securitization of land (Land Securitization is usually understood as the securities (or the flow of financial markets, financial products available on the form of financing, specifically refers to both supply and demand of funds designed to meet the requirements of a financial instrument, so capital needs are timely obtain the necessary funds, the fund suppliers to receive reasonable remuneration for financial intermediation process. in short, is to land revenue or land loans as collateral securities issued by the process. It is designed to be large value of liquidity of the land, fine differentiation, without loss of land rights under the premise of its securities, and use of the market's function of the land mass of capital and operating specialized. from the principle of land securitization of view, it embodies the ideas of modern financial innovation. General , land securitization has two sides: one as a means of financing, resulting in new financing, it absorbs the direct financing and indirect financing of the advantages is a non-debt-type financing, the second is used as a means of asset to overcome the unit value of land as large, immovable, indivisible, is difficult for small investors to buy illiquid shortcomings, thereby improving land use efficiency.


Second, the classification of rural land and the basic securitization process

Narrow asset securitization cash flows in accordance with the different types of securitized assets, the asset securitization into mortgage securities (Mortgage-Backed Securitization, referred to as MBS) and asset-backed securities (Asset-Backed Securitization, referred to as ABS) two categories. The difference is that the former mortgage based assets, which the underlying asset is in addition to assets other than mortgages.

Because land is a securitization of securitization of assets from the principle of development, so the securitization of land classification based on the above can also be divided into the land of mortgage backed securities and asset-backed securitization of land. Specifically, in China's rural land contracting management responsibility system under the premise of the land mortgage backed securities that financial institutions or intermediaries (mainly commercial banks will be given the land mortgage loans (the right to use agricultural land as collateral for the credits transfer, the issuer of securities by a specialist be packaged combination of financial claims to assets as collateral, design, issuance of securities in the process. land asset-backed securitization refers to the land development and management agencies or organizations (mainly the financial needs of agricultural enterprises were the lack of liquidity directly to the project assets (land can be converted into future earnings in the capital market securities can be sold on the process, such as the common issue of land bonds, land and stocks.

Generally speaking, the land use right to farmers mortgaged to financial institutions (mainly commercial banks and enterprises to the land of farmers integrated into the project assets, future earnings, based on the land to be able to complete the securitization financing. The same as securitization of land The basic process of securitization is: sponsors (mainly commercial banks or agricultural enterprises will be securitized assets to a special purpose vehicle (Special Purpose Vehicle, SPV) or purchased by the SPV can take the initiative in securitized assets, then these assets SPV together into a pool of assets (Assets Pool, then the pool of assets generated cash flow support the issuance of securities in the financial market financing, with the final pool of assets generated cash flow to pay off the securities issued. reposted elsewhere Free Download Center http://www.hi138.com three papers, the superiority of rural land of the securitization

Securitization of land in rural areas as an innovative financial system, its advantages are obvious. It changes to promote China's agricultural reform, accelerate agricultural industrialization, agricultural modernization, with great and realistic significance.

(An active land market, optimize the allocation of land resources
The location of the land fixed, limited supply of quality differences and determines the rational use of land resources is the objective of human survival and development needs. The current conditions of market economy in China, through a clear land ownership, the establishment of market-oriented system of land use rights to construct a flexible transfer mechanism of agricultural land has become the consensus of most people. land as a key market factors of production, following the securitization of the rural land, land resources into a liquid financial assets, not only active land market can also be obtained in the market regulation optimization.

(B reduce the risk of Land Management, expand financing channels of Agriculture
The key lies in the securitization of rural land through the securitization of financial intermediaries, non-farm operators to the community to raise a lot of money into agricultural production, lack of funds, not only to the broadening financing channels for agricultural production, but also to social investors Another unique design of the investments, that rural land securities. Also, land managers and land by means of high-risk securities investors a combination of asset securitization, optimization, natural get dispersed, while the income of land managers have been security, on the other hand to be more land securities investors.

(C overall arrangements for various types of agricultural land, agricultural modernization management
Land Securities to achieve a prerequisite for the process to include large numbers of agricultural enterprises. Agricultural enterprises is bound to do the work of agricultural land consolidation, to merge fragmented plots, finishing in the low-yielding fields, to strengthen water conservancy construction and soil improvement, the development of rational land use planning, optimization of land use structure, and further to achieve economies of scale of land to ensure access to future earnings. In this way, eventually there are plans to co-ordinate these various arrangements, the regional agricultural land, not only for the land to do the basic preparation of securitization and promote the rational use of advanced technology, farming and intensive management, natural as the industrialization of agricultural production, an important step in modernization.

(D improve land use, protect land resources
From our reality, land resources, scattered, dispersed the family as the main contracting, clear and unified, large-scale, advanced management of science and technology can not be compared. Play through land securities economies of scale of land management , changes in land extensive mode of operation, to change the mode to the appropriate intensive management, to improve the utilization of existing land resources in rural areas is clearly a huge tap potential. agricultural land appropriate scale, seeking the best cost-effective access to land, not only can make up for inadequate state financial support for agriculture idle land resources, waste of defects, and to the protection of arable land resources.

(E stable income of the farmers to speed up the process of building new countryside
Securitization of rural land to the peasants through land assets into securities with fixed income assets, so that farmers derive a secure and stable financial income. This part of the fixed-income funds to avoid the farmers because of natural disasters, price fluctuations of agricultural products and other objective risks factors, but also reduces the operational management and technical capacity behind the losses caused by such factors as inadequate.

In addition, rural land is to continuously promote the securitization of financial development in rural areas a shortcut, not only to develop agricultural business management professionals, the establishment of financial institutions in rural land can also provide a large number of rural surplus labor jobs, and accelerate the rational flow of labor resources in rural areas, further accelerate the pace of building new countryside. reposted elsewhere in the Research Papers Download http://www.hi138.com