Influence Of Agricultural Credit And Financial Support For Agriculture On Rural Economic Growth

Issues concerning "agriculture, rural areas and farmers", which are of great significance for getting rid of the urban-rural dual structure and building a moderately prosperous society in all aspects, have been the focus of the party and the government. The stability of rural economy and the increase of farmers’ income are inseparable from the development of agriculture. Agriculture is the main industry in rural economy. It determines the healthy operation of the national economy as well as the development of rural regional economy. However, fund shortage has always been the problem in the progress of agriculture since the foundation of the nation. Therefore, the government has to find a capital supporting system to support the agriculture in order to guarantee capital formation in agricultural production and accelerate the agricultural modernization in the process of urbanization and industrialization. At present, the agricultural credit and financial support for agriculture are the main source of fund for economic development in rural areas. It is of great significance to research their influence on the rural economic progress for the expansion of fund supply in rural areas, the integration of two kinds of fund and the promotion of fund utilization rate.In recent years, Shandong province has increased the financial and fiscal support for agriculture through rural economic system reform, in order to increase the farmers’ income and agricultural output, and revitalize the rural regional economy. Taking Shandong province as the research object, this thesis combines agricultural credit with financial support for agriculture, and analyzes the influence of them on rural economic growth. First, the thesis reviews the related documents about agricultural credit, financial support for agriculture and rural economic growth, and analyzes the documents briefly. Theoretical analysis of the relationship among agricultural credit, financial support for agriculture and rural economic growth is made to investigate the functional mechanism of the former two factors to rural economic growth. Furthermore, the thesis researches the development of rural economy, agricultural credit and financial support for agriculture in Shandong province from 1981 to 2012. Second, this thesis selects related data of Shandong province from 1981 to 2012 to carry on the empirical analysis, during which rural economic growth in Shandong province is divided into agricultural output and farmers’income. On the basis of co-integration test, the author has found that agricultural credit and financial support for agriculture play a role in promoting agricultural output and farmers’ income, the proportion of primary industry practitioners in rural employees are negatively related to rural economic growth. Through the Granger Causality Test, the author has found that agricultural credit is the Granger cause of agricultural output and farmers’ income, and financial support for agriculture is the Granger cause of farmers’ income, but not the Granger cause of agricultural output. That is to say, the proportion of primary industry practitioners in rural employees is not related to agricultural output and farmers’ income in Granger causality. In the end, the author puts forward the reform proposals under the related agricultural policies of our country, combined with the actual situation, the existing problems and the conclusion of the empirical analysis of agricultural credit, financial support for agriculture in Shandong province. The proposals from perspective of agricultural credit and financial policies, offer some help to solve the rural economic development for capital deficiency and configuration optimization, in order to promote rural economic growth in Shandong province.