A Research On The Mechanism Of Public Expenditure's Influence To Agriculture Growth

Since the 21st century, the Central Committee of Communist Party of China has issued 7 the 1st documents, the public expenditure supporting agriculture has being strengthened continually. But, the gap between the rich and the poor in our country was in the slam acceleration. The gap between the city and countryside has achieved the historical maximum level. Then, it has the necessity to study these questions: why do we not take the tangible effect while the government has issued so great supporting agriculture policies? What is the mechanism of the countryside public expenditure promoting agriculture growth? It has significance to reply these questions for us to enhance the effect of our policy supporting agriculture, and promote the development of our agriculture.First, this thesis has studied the mechanism which the different origin's public expenditure influence agriculture growth.The literature review of public expenditure in endogenous growth theory showed that former models of endogenous growth had not split up rural public expenditure's origin. So, This thesis had to expand the endogenous growth model. The expansive research indicated that, the countryside public product's mix origin has the practical significance regarding to the agriculture growth; by the way of mix origin, two origins could become the endogenous factor of economic growth reasonably, has the promoter action to the agricultural growth. And, the exterior origin has the bringing about effect to the interior origin, which explained the dominant position of state finance expenditure in rural public expenditure.In the analysis to mechanism of rural public expenditure promoting economy endogenous growth, this thesis indicated that the common mechanism of public expenditure promoting economy endogenous growth is by the government stimulating and increasing the personal department through knowledge capital, human capital, investments on R&D and so on, then raises the rate of long-term economic growth. The analysis indicated that the exterior origin of rural public expenditure brought about the internal origin through the income effect and the substitution effect mainly.Then, in the empirical study on influence of public expenditure to our agricultural growth, we examined influence of two origins in the countryside public expenditure to the agricultural growth, as well as relations between two origins by co-integration test and Granger test. The result of empirical study indicated that, two origins of our rural public expenditure have the promoter action to the agricultural growth, but, two origin's relationship is substitutive and unreasonable, which explained that it have the necessity to adjust the state finance expenditure in rural public expenditure. The Granger test demonstrated that this kind of substitution is not because the supply of public product from our peasant is sufficient excessively, thus the exterior supply draws back reasonably, but short because the insufficient from the exterior supply forced the peasant to increase the public expenditure by themselves in order to adapt the demand to the public product for agricultural production which increased day by day. And taking agricultural product subsidy as example, the research on practice of our state finance expenditure supporting agriculture further strengthened the understanding to the necessity of adjustment.Finally, this thesis has studied the mechanism which the different way of financial expenditure supporting agriculture influence the agricultural production.By the goal of promoting the food production and food security, according to our country food production's present situation, this thesis researched efficiency of the different grain direct grants mechanism comparatively, background of three aspect as eliminating the farmland to go out of cultivation, enhancing the grain per unit area yield, and promoting grain new variety and the new cultivation technique. The research indicated that when the phenomenon that farmland goes out of cultivation is quite serious, the subsidy according to the area surpasses that according to output, otherwise, the subsidy according to output the surpasses that according to area; But the mix subsidy mechanism exist intrinsic conflict, the government is unable to design the most superior subsidy policy. If does not count the subsidy cost, the mix mechanism may realize a higher grain to deliver, but the government and peasant household's expected utility will reduce; Furthermore, attaching a transfer payment in present subsidy according to output will increase the peasant household to enhance the grain per unit area yield, and then enhance the grain total output and government's expected utility. But the moral hazard in decentralization and small scale farming business causes this subsidy mechanism impossibly to be carried out at present.When the government hoped to enhance the grain through promoting the new variety and the new technology, and if the distribution of the duty's output is related, or the importance of duty is difference, then the most superior drive contract may be an antagonism. This developed the classical conclusion that excitation density must be supplementary during the multi-duty theoretically. But from practice of the grain subsidy policy, this conclusion request to implement difference subsidy to the old variety and the new variety, specially, if the new variety is important to the government, then should be higher than the old variety strictly to its subsidy's intensity; If the government typed the peasant household by using old variety and the new variety separately, then the government can obtain a higher net surplus from this kind of specialized decompose jig in the formula; But in the specialized production pattern, the subsidy policy of relative achievement comparison may further enhance the government effectiveness.By the goal to promote the agriculture technology corporation in order to reform traditional farming to modern agriculture, taking own capital investment of the agriculture technology corporation in the development early time stage as the object, this thesis studied the different function of different financial aid policy to attract the exterior stockholder's rights capital institute to the agriculture technology corporation. The research indicated that the significance that the public capital carries on the subsidization to the early stage of agriculture technology corporation lies that, it may facilitate the project which own capital investment is insufficient to have support from the stockholder's rights capital, thus strength the scale of agriculture scientific innovation. But if the public capital requests to share the project income in proportion, then this kind of paid subsidization does not compare the free subsidization, regardless of the scale of agriculture scientific innovation and the expected revenue of government; But the subsidization policy which only requests fixed return is drives neutrally, it has the same nature nearly with the free subsidization. This conclusion has the important significance for reality enlightenment: the creditor's rights financing guarantee at the early stage of the agriculture technology corporation uses the exterior creditor's rights capital to replace the financial capital investment, that may lighten government's financial burden greatly, on the other hand, it equates to free direct investment from the government speaking of support function to the agriculture technology corporation.The innovations of this thesis are as follows:â‘ Through splitting up the origin of countryside public expenditure and carrying on the expansion to the fundamental model of endogenous growth theory, this thesis overcame the limitation in the former literatures that the public expenditure stem from the economic system, but did not research the influence of exterior public expenditure, theoretically has been clear about the dominant position and the function of state finance expenditure supporting agriculture in the countryside public expenditure. At the same time, has promulgated the reason and unfairness OF the substitution relations between the exterior origin and the interior origin through the empirical study, has provided the reality basis for policy adjustment to state finance expenditure supporting agriculture.â‘¡The research on the different grain mechanism has been clear about the scope of different subsidization policy, pointed out the limitation of present policies for promoting food production of new variety and new cultivation technique, and further pointed out the direction for the subsidization policy adjustment in the future. At the same time, this article has developed classical conclusion by the multi-duty principal-agent theory theoretically, found the theory basis to implement the strong drive in the high risk and important task.â‘¢The research on the different financing subsidization mechanism in order to develop the agriculture technology corporation has been clear about the significance of public capital subsidization, and the paid subsidization for proportionate share income is inferior to the free subsidization strictly, but the subsidization mechanism which only requests fixed return is drives neutrally, it does not affect the scale of agriculture scientific innovation, also does not affect the success ratio of the innovation project. This conclusion indicated the direction of the financing subsidization mechanism under the financial restraint.