A Study On Agricultural Industrialization And Farmers' Income Increase In China

The development of modern agriculture and building a new socialist countryside is an effective way to promote the growth of farmers’ income and reduce the urban-rural gap. The industrialization of agriculture as a fundamental way to develop modern agriculture has changed our self-enclosed, self-sufficient traditional agricultural status, breaking the shackles of the household contract responsibility system. The Chinese traditional agriculture from a closed to an open society adapts to China’s agriculture development of productive forces, provides a realistic approach in line with China’s national conditions, and has a very important significance to promote economic development and farmers’ income growth in rural areas. Therefore, focus on the agricultural industrialization, it has important theoretical and practical guidance value to study its impact on farmers’ income and to explore how best to increase farmers’ income.Firstly, from the purpose of this study, the studies of the domestic and foreign scholars on the agricultural industrialization and farmers’ income increase were reviewed to define the meaning of the agricultural industrialization, and based on industry organization theory, transaction cost theory and scale economy theory, analyzed how the agricultural industrialization influences farmers’ income. Secondly, for the current development of agricultural industrialization, the paper points out some of the problems existed objectively. Lastly, in order to measure the level of agricultural industry, the paper use index rating system to calculate with the data from 1999 to 2012. This paper uses the Cobb-Douglas production function to construct a panel data model to analyze the problem positively, based on the endogenous growth theory. Choose the data of China’s 30 provinces, municipalities from 1999-2012 (except Tibet) as a sample to analyze the influence of agricultural industrialization to farmers’ income by using the panel data analysis model.It turns out that:the farmers’ income and the level of agricultural industrialization raised gradually, and agricultural industrialization and farmers’ income was positively correlation which means the agricultural industrialization plays an important positively effect on promoting farmers’ income in China. Lastly, the paper proposes policy and recommendations to promote the industrialization of agriculture to increase farmers’ income.