An Empirical Research Of The Relationship Between Agricultural Products Trade And Farmers’ Income In Shandong Province

To increase farmers’ income is the key of expanding domestic demand and realizing the benign development of the national economy. With the in-depth development of international trade, the trade of agricultural products has become an important factor influencing peasants’ income. Shandong province is the largest agricultural products trade province in China. Trade volume of agricultural products in Shandong province in 2014 amounted to 42.7 billion dollars and the agricultural products export trade volume totaled 15.73 billion dollars, which has occupied first place among all the provinces in China for 16 years. The per capita net income of rural residents in Shandong province continues growing, ranked front in recent years. Using the panel data of 17 cities in Shandong province to study the specific quantity relationship between agricultural products trade and farmers’ income in Shandong province has typical representative significance. What’s more, the differences between coastal cities and inland cities in geographical position, transportation, economy development level and other aspects may result in different impact which agricultural products trade has on farmers’ income in coastal cities and inland cities. Respectively examining the regional effect of agricultural products trade on farmers’ income under the samples of overall, coastal and inland cities will provide a quantitative measurement and theoretical guidance for the government in Shandong province in the aspect of formulating agriculture and foreign trade policies and implementing the policies according to different regional reality.Based on the comprehensive summary of the relevant literature, firstly this paper discusses the theory basis and mechanism of the impact which the agricultural products trade has on farmers’ income; Secondly, by using the statistical analysis method, the paper analyses the agricultural products trade and farmer’s income in Shandong province; Again, using panel data model, it examines the impact of the agricultural products trade on farmers’ income and the differences between the overall, coastal and inland groups empirically. In order to increase the reality of the research, the model also introduced a policy variable--grain subsidies, as well as the first industrial and the second, three industrial output variables. The empirical results show that: 1. In Shandong province, agricultural products export trade has significant positive effect on the increase of farmers’ income, and the effect which the agricultural products export trade has on farmers’ income in coastal cities is more significant than that in inland cities; 2. Agricultural products import trade has a negative effect on the income of the farmers, under the overall and inland cities samples in Shandong province, but the negative effect is not significant. In coastal cities, the negative effect of agricultural products import trade is significant. Finally, based on the summary of the empirical results, the paper puts forward the related policy suggestions.