Research On Fiscal Funding In Agriculture In Inner Mongolia

Since the21st century, China’s rural economic policy has undergone remarkable changes, the attetnion of the policy making turns to "taking less and giving more", which embodied in State’s economic support to the socalled three Issues of Countryside, Agriculture and Farmers, especially financial support. As a result, governments at various levels are increasingly involved in the allocation of agriculture resources and rural development. The main focus of the policy has shifted to increase farmers’income, promote agricultural modernization, and construct a new socialist countryside.During the period of the socio-economic transition in China, its reform of the investment system ought to be adapted to rural economic and social transformation, and especially the investment policy on "Agriculture, Countryside and Farmers" should be made timely adjustments in order to play a greater role.The existence of three issues of countryside, agriculture and farmers has an urgent need to deepen existing theory and policy research. From the perspective of public finance, this dissertation discusses the Inner Mongolia agricultural investment issues by using theoretical and empirical methods of public finance, industrial economics and economic growth theory, and initially built a theoretical system to broaden the local government agricultural investment in finance, optimize the investment structure and increase input efficiency. Main research works have been onducted as follows:First, by referencing to the previous study at home and abroad, this dissertation elaborates related theories of public financial input in agriculture, which lays a theoretical foundation for further research.Second, based on a reviewing analysis of the system changes, scales, structure and efficiency of public financial input in agriculture in China as well as in Inner Mongolia since the founding of People’s Republic of China, this dissertation illustrates how the agricultural economy has been influenced by public financial input in agriculture. When the scale of public financial input in agriculture is suitable and its structure is reasonable, the agricultural growth will inevitably be accelerated. On the contrary, when public financial input in agriculture is insufficient and its structure is unreasonable, it will be hindered. Based on a review of the problems involving China’s public finance to agriculture, this dissertation makes a comparison of the policies concerning public financial input in agriculture in some other countries and regions and offers a discussion of the experience and enlightenment as well.Third, based on a normative analysis, the dissertation conducts an empirical test on the relations between the scale of fiscal expenditure for supporting agriculture, the structure of fiscal expenditure for supporting agriculture and agricultural growth in Inner Mongolia in1985-2011, using linear regression model (LRM), time series model, and extended Cobe-Douglas production function model. The result suggests that the level of fiscal expenditure for supporting agriculture is lower than that of the contribution of agriculture to the national economy in Inner Mongolia. The contribution of both the construction of agricultural infrastructure and science and technology to agricultural GDP is quite low.The Fourth part proposes the policy suggestions. This stduy establishes a stable financial input system so as to optimize the structure of fiscal expenditure for supporting agriculture, improving the efficiency of the use of fiscal fund for agriculture, flexibly using the means of agricultural financial investment and financing, promoting the process of the legalization and standardization of agricultural investment, improving the local government’s financial support capability of supplying public goods and services.This disseration carries out independent research, and puts forward a proposition from the perspective of public finance to study fiscal expenditure on agriculture in a particular area. The study results suggest that Grainger causality exists between Inner Mongolia fiscal expenditure on agriculture and stimulating the growth of agricultural economy in the long term. However, Grainger causality doesn’t exist between fiscal expenditure on agriculture and stimulating the growth of agricultural economy in the short term. The level of investment in agricultural infrastructure is not stable in Inner Mongolia, and has strong volatility, which long-term mechanism of the agricultural infrastructure has not been established; Agricultural Science and Technology has not yet formed an effective alternative to the labor input in Inner Mongolia agricultural productivity growth, the contribution rate of technology technical level is lower to agricultural production.