Official calls for China’s major banks to lend to farmers have been effectively undone by other official orders for banks to reduce their holdings of bad debt, Reuters reported, citing bankers, economists and analysts. The share of loans going to agriculture has declined every year since 2010, official data show; in 2014 banks lent RMB306.5 billion (US$49.1 billion) to agriculture compared with approximately RMB1 trillion for margin finance for use in stock speculation and RMB2.8 trillion for real estate. Banks have also failed to adapt to demand from larger-scale farms, and self-sufficiency goals mandating production of staple grains and starches prevent farmers from higher-margin crops like fruits and meats.
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