The Effects Of Financial Expenditure For Supporting Agriculture On Increasing Farmers’ Income In Henan Province

Henan，as a major agricultural province, shoulder the heavy responsibility for theproduction of high-quality food；as a populous province, bear the responsibility forimproving the quality of life of the people and increasing people’s income.Agricultural population accounts for a large part of Henan’s total population, theincrease of farmers’ income directly affects the outcome of New Country Constructionin Henan, directly related social harmony. The inferiority and positive exterior ofagriculture, decided that agriculture can not develop without governments’ investment.The total agricultural expenditure of Henan Provincial Government increases yearafter year, but how is the extent of its role in promoting the increase of farmers’income? Is the structure of expenditure reasonable? These questions need to bestudied further.In this paper, comprehensively combing the books and theories about fiscalexpenditure on agriculture, rural areas and farmers’ income.The article, on the basisof the literature review, drawing on previous studies, gives own research methods,defines the meaning of certain concepts involved, which leads to elaborate thetheoretical basis of financial support for agriculture and the necessity of farmers’income increased. Chapter three, from the total and internal structure levels,toanalysis the size of the fiscal expenditure on agriculture in Henan Province and someproblems, found that since the reform and opening up, the fiscal expenditure onagriculture in Henan Province to increase year after year, but its growth rate is verydifferent. The main fiscal expenditure on agriculture is supporting agriculturalproduction and agriculture operating expenses. Fiscal expenditure on agriculture isnot enough, the structure is irrational, the investment of Agricultural TechnologyPromotion is small. The fourth chapter studies the changes of the growth of farmers’income in Henan Province, found that the overall Henan Province, farmers’ per capitanet income increased year after year, but the ratio of urban and rural residents’ incomeup to3. At the same time, operating net income and wage income accounted for morethan90%in the rural per capita net income of rural households in Henan Province,and in recent years, the proportion of wage income in the income of the farmersalready exceeded one-third. Chapter five use Unit root test, Cointegration test, Errorcorrection model to research the relationship between the financial expenditure for supporting agriculture and the increase of farmers’ income, analysis drawn that100million yuan increased in fiscal expenditure on agriculture in the short term, willcause per capita income of farmers to increase by1.12yuan. Finally use Cobb-Douglas production function, researcher knows that expenditure on agriculturalinfrastructure is most useful to increase farmers’ income, expenditure on supportingagricultural production and agricultural Operating Expenses followed.The last part gives several policy recommendations, such as, to increase moreinvestment in agricultural science and technology, and strive to develop the laboreconomy, strengthen the supervision and management of the funds of the fiscalexpenditure on agriculture.