Study On The Local Governments' Behaviors In Developing Cycle Agriculture

As a particular sector of the national economy, agriculture constitutes its basis and functions as the premise for the growth of other industries. Although it can produce prominent social benefits, agriculture is also an incompetent industry with low economic results. As a result, the governments of all levels in the world adopt different policies to support the growth of agriculture based on its different stages of development. Now China's agriculture is subjected to the environment and resources seriously, therefore, to discuss economical agriculture development mode is the key task of central government and the local governments of all levels. The cycle agriculture is a mode of production that puts the theory of cycle economy into practice. It is featured by the decrease in resource and material inputs as well as reduction in residue generation and discharges in the process of agricultural production to achieve an economical and sustainable agricultural development. The academic community has reached consensus on the necessity of cycle agriculture. As a consequence, it is of great importance, both in practice and in theory, to study how to transform the mode of agricultural production, what roles governments can play in promoting the cycle agriculture and in particular, in which ways the local governments' economic conducts influence the development of cycle agriculture. The studies about these problems are scarce, therefore it is theoretically and realistically meaningful to study these problems.In market economy, whether cycle agriculture can come true depends on the benefit games of economy bodies, the transformation of local governments' conducts is the key. On the one hand, local governments act as one link in China's administrative chains. On the other hand, they also play as the investors and guards of the local economy. Their double status places the local governments in a special position in the economic development, which makes them both executers of Central Government's policies and players of relatively independent regional economies. This paper put local governments' conducts into the economic analysis of cycle agriculture development process, and review local governments' conducts in this process by adopting historic and logic methods. By using the cycle economy theory, public choice theory, the neo-institutional economics, modern economic growth theory, market failure and externality theory, the thesis bases itself on the idea of complementation between government conducts and market behaviors. It also integrates the approach of empirical and normative research and conducts a profound and systematic probe into the connotation and requirements of China's cycle agriculture in the new period, and into the benefits, achievements, approaches and norms of local governments' conducts in their efforts to promote the cycle agriculture. Moreover, the thesis carries out a comparative study on the conducts of Chinese and overseas local governments in promoting the cycle agriculture. Based on this study, it proposes a yardstick helping to optimize the local governments' conducts in speeding up the cycle economy in China.To start from the theoretical features of cycle agriculture, by conducting a comparative analysis on the typical model of cycle agricultural growth in developed and developing countries including China, the thesis reaches a conclusion that cycle agriculture cannot develop itself on its own. Instead, its growth depends on the guidance and support of governments of all levels. Based on this, the thesis highlights the analysis on the economics features of cycle agriculture and focuses on the hierarchy structure of local governments, which has a direct impact on the administration of governments and defines and restricts their roles and functions. A local governments' multi-target behavior function is introduced. Moreover, a correlation coefficient is analyzed to highlight the relationship between the economic behaviors of local governments and the cycle agriculture. The thesis discusses in an overall and systematic way the factors blocking the cycle agricultural development, including the economic institutions and elements as well as the supporting systems. The conclusion is that China needs the institutional innovation, in which the local governments play a very important part, and a new balance of interests to develop its cycle agriculture, namely, the compatibility of interests and subjects of interests.By building the model of cycle agriculture based on products market, and factor market the thesis studies, with economics methods, how the local governments can affect the economic behaviors of farming households and enterprises engaged in processing agricultural products and how they influence the farm producers' business environment to upgrade the competitiveness of the region's cycle agriculture. By employing the analytical approach of the Game Theory in analyzing the relationship of interests among the local governments of the same level, local governments and Central Government, local governments and micro subjects of cycle agriculture development, the thesis states clearly the impacts of local governments' conducts on all the economic subjects in developing the cycle agriculture, and points out that the local governments are the designers, supervisors and executers of incentives in the region's cycle agriculture. The local governments assume the responsibility of establishing the incentive mechanism by enacting or altering the rules.