The Research On The Impacts Of Agriculture Policy On Agriculture, Rural Areas And Farmers

Fiscal expenditure on agriculture is increasing continuously in China recently. At the same time, expenditure form and policy goals are diversified. Financial policies for supporting agriculture have great influence to promote the development of agriculture. Financial funds for supporting agriculture are mainly used to support the agricultural production, direct subsidies to grain producers and promote rural education and health development. At present, the financial support system which include supporting the grain production, increasing the farmers’ income have been revealed.This article firstly analyzes the economics theory basis of fiscal support agriculture in our country. It also analyzed the action mechanism and effect of financial policy about agriculture and rural, then quantitatively studied the effect of fiscal policy on agricultural output and farmers’ income by conducting agricultural output model and the famers’ income model that are estimated using the generalized method of moments (GMM).Secondly, this paper selected panel data of18provinces, and establish six dynamic panel data models to research the effect of the fiscal policy on agricultural to the economic growth and farmers’ income of different regional by the generalized moment method (GMM-DIFF).The main conclusions of this paper are as follows:(1) At the national level, the fiscal policy of agricultural promote the increase of agricultural output by facilitating agricultural modernization, reducing the cost of agricultural production and motivating the enthusiasm of farmers. The effect of the subsidies policy to the agriculture product is slightly less than the fiscal expenditure for supporting agriculture. Financial policies for supporting agriculture are helpful to increase income of farmers through direct subsidies or the marginal cost and marginal benefit of agricultural production. The relationship between agricultural tax and the farmers’ income was negative, the exemption of agricultural tax significantly promoted the growth of farmers’ income and agricultural economic. (2) At the provincial level, the effect of fiscal expenditure for supporting agriculture and agricultural subsidies to agricultural production and farmers’ income growth is effective. The role of financial support agriculture expenditure to the low production area is most obvious. The agricultural subsidies can make up for externality and market failure of the agriculture, and promoting the efficiency of social resource allocation. Agricultural subsidies can raise the level of agricultural output by stimulating farmers to grow quality crops varieties, increasing inputs of production, improving the level of mechanization and the desire of farmers to plant grain. The effect of agricultural subsidies to agricultural production is most obvious in middle and low production area. For all regions, the first-order lag of agricultural output is very significant, indicating that it has dynamic effects. Furthermore, the agricultural machinery total power is the most significantly factor for high output regions, however, the seeded area can product the great influence on low output regions. And the degree of affected damage has the minimal impact on high output areas, which indicates that the agricultural infrastructure of big agricultural province is relatively more completion.(3) The estimate results of farmers’ income model showed that the effect of agricultural subsidies to farmer income is most significant for low production area. It also can improve the farmers’ income through promoting agricultural output growth, increasing farmers’ transfer payments and accelerating rural labor transfer. Agricultural output has significant positive effect on the income of farmers, and the agricultural production can better promote the farmers’ income. In addition, the agricultural tax has less impact to the agricultural output and the farmers’ income.