A Positive Study On The Relationship Between Funds Of Agricultural Credit And Fiscal Expenditure For Agriculture And Farmers' Income Growth

China is a large agriculture country, farmers cannot achieve well-off life, not to mention the well-off life of people all over the country. China is in the development stage building a moderately prosperous society. To achieve well-off life of people throughout the country, first of all is to achieve well-off life of farmers. At present, the biggest stumbling block of successfully achieving this great goal is the "three Agriculture"issues. China's vast territory, there must be the unbalanced development of regional economic, in a long-term East is strong and West is weak, it has become the primary problem that affect the agricultural structure adjustment, social harmony and stable development. Jiangxi Province is a large agriculture province which has more than 2600 million agricultural population, agriculture plays an important role. In 2009, the GDP of Jiangxi Province is 758.92 billion yuan, increasing 13.1%, per-capita net income of farmers is 5,000 yuan which is the first time reached 5,075 yuan, increasing 8%. The comprehensive capacity of agriculture has greatly improved, rural economy has made great achievements. Financial support for agriculture is continuing to rapidly increase, new added credit plays an important role in support of the agricultural structure adjustment, the scale of operation.At the same time, we should clearly recognize the real gap between us and developed regions, the national average,it requires us to take more forceful measures to strengthen the combination of financial credit and financial funds, effectively invest in agricultural development, promote increasing farmers'income. Government Work Report of Jiangxi Province in 2010 also propose the target that farmers per capita net income is up to 8%. But there are many uncertain factors,such as the international financial crisis, the low industrial level, unbalanced development, the contradiction of fiscal balance, our pressure is still very large. To achieve sustainable growth of farmers'incomes, the supply of funds is very important, the total amount of funds must maintain appropriate growth and allocate efficiently.To improve the income of peasants, must establish a perfect working mechanism, coordinate the government and financial sectors, increase the effective capital investment for"three Agriculture", to meet the demand for diversified financial services in rural areas, improve and enhance the rural financial services, promoting agricultural production and farmers income and rural economic development.In this context, this paper analyze the basic conditions, features of agricultural credit, agricultural financial expenditure and farmers'income based on the actual data from 1988 to 2008, and on this basis, we get the the relationship between them using of empirical methods such as cointegration test, Granger causality test, etc. The conclusions are:(1) the agricultural credit and farmers'income of Jiangxi Province exist cointegration relationship, cointegration test shows that between 1988-2008, Jiangxi agricultural loan growth promote increasing of farmers'income, Granger causality test confirmed that the increased agricultural loans lead to the increased farmers'income, which indicates that the agricultural credit can make the farmers'incomes increased. The impulse responses and variance decomposition educe that the investment of agricultural credit can promote the farmers' income and the effect is permanent, the contribution rate is up to 20%.(2) the fiscal expenditure for agriculture and farmers' income of Jiangxi Province exist cointegration relationship, cointegration test shows between 1988-2008, fiscal expenditure for agriculture and farmers' income have a long-term cointegration relationship, in the short term its effect is weak, but as time goes by, its role in promoting the income of peasants increased gradually. Granger causality test confirmed that the fiscal expenditure for agriculture lead to the increased farmers'income. The impulse responses and variance decomposition educe that the investment of fiscal expenditure for agriculture can promote the farmers'income and the effect is permanent, the contribution rate is up to 15%.(3) Granger causality test shows that agricultural credit and fiscal expenditure for agriculture are not Granger causalities each other, indicating agricultural credit and fiscal expenditure for agriculture are in a separate state, the lack of effective coordination and communication leading to inefficiency of agricultural support. This shows that there is not a effective integration in the financial and monetary sector. Finally, we find out that the reason of inefficiency for agricultural support is that agricultural credit and fiscal expenditure for agriculture continue to increase, however the efficiency of investment into agriculture investment is very low calculating agricultural credit and fiscal expenditure for agriculture into fixed assets investment ratio.Rural capital does not really convert into investment.The outflow of capital is very serious. The gap of technical efficiency and pure technical efficiency between various regions in the province is large,due to the differences of agricultural resources,tourism resources,transportation resources,and make that the marginal productivity of agricultural credit and fiscal expenditure for agriculture is also different.This reveals the fact that there is low efficiency of capital in our province, only by increasing capital investment instead of enhancing the formation of an effective mechanism for capital in rural areas, it is not effective or even adverse effect for increasing farmers' income. Then according to the actual situation of Jiangxi province, we propose the suggestions to promoting the increase of famers' income.Such as establishing sound policies and systems to provide legal protection for increase of famers'income;establishing multi-level rural financial service system to provide farmers with a variety of financial services;Increasing the financial support for agriculture investment and strengthening supervision and management of funds;strengthening integration of the financial and fiscal support for agriculture to increase efficiency of funds.