Agricultural Tax Reform And Agricultural Growth In China

Since China opened to the world whose agriculture has made great achievements,however, farmers are increasingly heavy burden, In order to reduce farmer’s burden,China took tax reform in2000and exempted agricultural tax in2004in Jilin andHeilongjiang provinces. In2005, this reform ranged further and exempted it all over Chinain2006which greatly reduces the burden on farmers and increases the income of farmers,maybe which also affects the growth of agriculture. This paper verifies the connectionbetween the agricultural tax reform and agricultural growth by using Cobb Douglasproduction function. The data is collected from1998to2009which ranges26provincesand autonomous regions.Firstly, this paper introduces the background and the importance of the topic. Then itsummarizes the references and gives the key points and ideas. Secondly, this paper statesthe background, importance and process of China’s agricultural tax reform, and at thesame time, discusses something about the reason for agricultural tax exemption in detail(here there are3factors, they are the importance of protecting state food safety, fully usingof resource and the high cost of taxing) and then proposes the contribution of agriculturaltax exemption to agricultural growth at the end of this paragraph. Thirdly, it outlines theagricultural development in China since the reform and opening up, at the same time, itgives some empirical analysis by using Cobb Douglas production function which impliesagricultural tax reform has some positive effect on agricultural growth, and thecontribution of this policy change accounts for10%in the productivity growth. It statesthat it is the technological progress promotes the agricultural growth. In the end, the papercomes to the conclusion and gives some policy implications.