Empirical Study On Impact Of Agricultural Credit For The Growth Of Farmers’ Income

Farmers’ income has been a huge increase with the development of the rural economy since the reform and opening up. At the same time, regional differences of farmers’ incomes becomes more and more obvious and expading. Both of level and growth rate of farmers’ income in the eastern region are much higher than the central and western regions.And the income of farmers in the western region is lower significantly.The growth of Farmers’ income imbalances among regions seriously.It becomes an important factor that affects stability of social. To promote the growth of farmers’ income in the central and western regions, the state has increased investment of rural credit,especially in the western region. However, rural credit still has regional imbalances due to the level of regional development and institutional factors. The quantity of agricultural loans in eastern region of the total is much higher than the central and western regions.Especially, the agricultural loans in the western region can not meet regional development. It makes the financial development in urban lags behind the rural finance which becomes the weakest link in the China’s financial system.Theoretically,agricultural credit should promote the growth of farmers’income as a capital investment.However,on the one hand the state continuously increase rural credit especially in the western region,on the other hand farmers’ income growth in the western region still lags behind. How to effectively promote the role of agricultural credit support to farmers’ income growth is the current problem that has been a concern.So this paper analyzes the influence of agricultural credit on farmer’s income growth in the three areas with both of the theoretical analysis and empirical analysis. We could seek the conversion conditions from regional agricultural credit funds to agricultural production through analyzing the differences and reasons for differences. It could narrow the regional disparities of farmers’income and promote coordinated growth of regional farmers’ income.Specifically, this paper includes the following four parts:The first part, the theoretical analysis. First,I describes the background and significance. And afford a simple summary and commentary for the current research of experts and scholars at home and abroad. Then discusses related theory.Finally, I analysis the influence of agricultural credit on farmers’ income growth from the theoretical analysis. The second part, current situation and comparison of agricultural credit inputs and farmers’ income in different regions. This article divided three regions according to the National Bureau of Statistics and kicked out the provinces witch agricultural credit is missing.Finally,select rural data of23provinces from yearl995to2011.Through regional comparison it finds that regional differences are large both in the income of farmers and agricultural credit,and it shows a pattern of the west<middle<east.The third part, empirical analysis. This papers collected data from1995to2011in23provinces, according to the relationship between agricultural credit and farmers’ income, while introducting four variables:rural fixed asset investment,agriculture credit, rural employment structure and rural land area.Empirically analyze agricultural credit impact on farmers’income growth based on panel data models. The empirical results show that:(1) Agricultural loans in eastern and central regions could promot the growth of farmers’ income while not in western region;(2) Increase in the eastern part of the rural labor force had no significant impact on farmers’ income, while reducing the central and western regions of the rural labor force was able to significantly increase their income;(3) Rural arable land in the east and west couldn’t promot farmers ’income growth effectly while it’s opposite in middle;(4) In three regions, the increase in rural fixed assets investment and fiscal expenditure on agriculture could increase farmers’ income significantly.The fourth part, conclusions and policy recommendations. Summary According to empirical results.The paper proposes policy recommendations about improving the efficiency of agricultural credit, shorting regional differences and promoing coordinated growth of regional farmers ’incomes. Namely:building mode of regional rural financial supply, optimizing the structure of the central and western rural labor, increasing rural investment in fixed assets and financial support for agriculture of underdeveloped areas.