Analysis Of China’s Fiscal Agriculture Input

Agriculture is a basic industry of national economy, but also a vulnerable industry. The importance and vulnerability of agricultural development made it an inevitable choice for one government to support agriculture in every means. Looking around the world, agriculture protection policies were taken place in most of the countries in order to promote the country’s agricultural development within the allowable range of international laws. After the reform and opening up, China has also introduced a series of fiscal policies to protect our agricultural development. These fiscal policies and financial funds have played a significant role in promoting the development of China’s agricultural economy.This paper analyzes the history of our government’s fiscal policies of agricultural inputs, and the current size of China’s financial investment in agriculture, including absolute size and relative size of the financial funds. Based on the food supply situation, the country was divided into three regions, major producing area, major sales area and balance area. Then we discuss the impacts of fiscal agricultural inputs policies in each area according to the following standards, the agriculture GDP, grain production and farmer’s income. By analyzing the method to determine the optimal fiscal agriculture input scale, we set up an optimal fiscal agricultural investment scale model, OPAI model in short. Then we use the Cobb-Douglas production function to determine the optimal input scales in major producing area, major sales area and balance area. We draw the conclusion that the size differences of fiscal agriculture input scale among three areas are significant, the effects of financial investments showed the same result as well. The scale of fiscal agriculture input in main producing area and balance area need some adjustments. At last, we put forward some corresponding counter measures for the current problems.