Relationship Study Between The Financial Support For Agriculture And Agricultural TFP Of Henan Province

Since the reform and opening up, China’s economy has rapidly developed, and the level of urbanization has been continuously improved, which is also accompanied by the reduction of arable land and a large number of rural labor transformation. But as the foundation of a national economy and the basic protection of people’s live or production, agriculture is required to constantly increase their output, which must result in a serious contradiction between the high demand in market and the limited resources of nature. Therefore relying on the traditional increasing in capital and labor inputs cannot meet the practical needs, and we should turn up to focus on improving agricultural total factor productivity (TFP). But because of Agriculture’s inferiority and low rate of return, the agricultural sector alone investment to promote the improvement of the TFP is limited and also unrealistic, therefore it need the support of government, especially the financial support. However, what the relationship between financial support for agricultural and agricultural TFP is, how it’s structure impact agricultural TFP, as well as how it adjust to further improve the the agricultural TFP. This article takes Henan Province for example to study these questions, and this paper consists of six parts:The first part is introduction which made clear the background and significance of the this topic, and summarized of the existing research literatures, followed by research content, objectives, methods and technical route, and the probably innovations.The second part is the theoretical basis of this article, the first is a brief introduction to the concept, necessity and inevitability of financial support for agriculture. Then it introduced the agricultural TFP’s concept, theory development process and various calculation methods. At last of this part qualitatively analyzed the intrinsic role of the financial support for agriculture to agricultural TFP in theory.The third part is to analyze the situation of financial support for agriculture and agricultural TFP in Henan Province, including its size and structure of financial support for agriculture, as well as the corresponding trend of agricultural TFP, which in order to pave the way for the subsequent empirical analysis.The fourth part is the empirical and also the focus part of this article. Firstly tested the significant impact of the scale of financial support for agriculture on agricultural TFP, and obtained significantly results. And then empirical analyzed the relationship between the structure of financial support for agriculture and agricultural TFP, which draw a causal relationship, and analyzed by regression that the expenditures of support agricultural production, operating Expenses and Science-technology three fees have positive effect on agricultural TFP, but the infrastructure spending is ineffective, even has the possibility of counter-productive. At last, take theoretical explanation of these results.The fifth part is to make appropriate policy recommendations according to the empirical analysis results, mainly from the scale and structure of financial support for agriculture, and regulations in these three areas.The sixth part is the conclusions of the entire article, and the outlook in this research field.The main innovation of this paper:on research methods, this paper takes Henan Province as object, which narrows the scope of the study to reduce the impact of the system, geography and other factors.During the empirical analysis,this paper used the DEA method to estimate the agricultural TFP, which avoid the error of the assumption of the production function. When processed the data, I used the depreciation and weights methods to handle agricultural infrastructure spending and Science-technology three fees, which is closer to practice. And when make policy recommendations to the empirical results, it not only from the point of view of the size and structure of financial support for agriculture, but also from the macro level of the laws and regulations.