The Research Of Fiscal Expenditure For Agriculture Effects On Rural Finance Development

"Three Rural Issues" is the core issue of China’s rural development, rural finance is an important part in our financial system and also an important force to solve the "three rural" issue as well as an important pillar of support for the construction of a new socialist countryside. Solving the "three rural" issue needs rural finance to allocate resources between urban and rural areas rational. With the support of the rural finance, promote long-term stable development of agriculture and the transition to modern agriculture, narrow the gap of urban and rural area, promote rural to be prosperity and guarantee farmers’ income increasing stably. At the same time, production and management of funds for rural enterprises and rural residents also need to rely on the support of rural finance. Therefore, whether the rural finance develop healthily or not to assume the responsibilities described above, related to the success or failure of new rural construction. The development of rural finance impact the development of social and economy, and the core national interests. How to promote rural financial development effectively is one of the important issues need to be addressed.Agriculture innate inferiority lead to a high risk but low-yield characteristics. Also, dependence on the geographical and climatic conditions so that it benefits uncertainty increase greatly. Long investment cycle characteristics increase the risk of agriculture further. So, under the influence of these characteristics of agricultural services, the risk and return of rural finance is not matched: high-risk but low-yield. At the same time, there is the problem of failure of market mechanisms in rural finance market. Comparing to other form of finance, information asymmetry is more serious in rural finance. However, China’s rural financial development is not perfect, and the risk compensation mechanism has not been established and perfected. Therefore, relying on the market solely, rural finance cannot be self-development. On the other hand, rural finance reform in China has adopted a top-down mode change, and the path dependence makes the development of rural finance cannot without government support.Supporting rural finance is mainly reflected in the fiscal expenditure and subsidies。 Among them, the fiscal expenditure for agriculture is the expenditure that invest most directly in rural areas. Reasonable fiscal expenditure for agriculture gives full play to the financial support for agriculture, and promote economic development in rural areas, promote the development of rural finance and improve their living standards.This paper uses VAR model and multiple regression model to analyze the fiscal expenditure for agriculture effects on rural finance development Analysis concluded that impact of fiscal expenditure for agriculture on rural finance development in China is different in different region, but overall, the effect of fiscal expenditure for agriculture on rural financial development in China is weak. Therefore, in order to promote the development of rural finance, the article summarizes the sort of foreign financial support for rural development policy and make suggestion for the development of rural finance.