Research On The Impact Of Fiscal Expenditure For Agriculture On Rural Residents' Consumption

Agriculture is the very foundation on which we build our country. The development of agriculture concerns the fundamental benefit of peasants. Our government has always attached great importance to the development of agriculture, and the financial support to agriculture is increasing year by year. The key point of this paper is to study that whether fiscal agriculture expenditure can improve farmers'living condition and consumption level.In theory, this paper analyses the mechanism of how fiscal expenditure affects household consumption and explore the interrelationship between them by summarizing the domestic and foreign research literature. In practice, based on time series data from 1978 to 2014 of China's fiscal agriculture expenditure and consumption of rural residents, this paper makes a detailed analysis first, and then an empirical study on how the overall and structure of fiscal agriculture expenditure effects on the consumption of rural residents, by virtue of cointegration theory and vector error correct model. The study finds that overall fiscal agriculture expenditure has a crowd-in effect on the consumption of rural residents in the long term and a crowd-out effect in the short term, while analyzing from the structure, the effects are various. Expenditure for assisting rural production part and non-production part crowds in the consumption of rural residents in the long term, but crowds it out in the short term. Rural capital construction expenditure crowds out the consumption of rural residents in the long term, while crowds in subsistence consumption in the short term and crowds out development and enjoyment consumption in the meantime. Technology promotion expenditures in rural areas, no matter in long term or short term, always have a crowd-out effect on the consumption of rural residents; rather, rural relief found has a crowd-in effect in both long term and short term. Based on the empirical analysis, this paper puts forward the following four suggestions:firstly, increase financial support for agriculture and establish safeguard mechanism for financing; secondly, optimize the financial agriculture expenditure structure and adjust the consumption structure of rural residents; thirdly, promote rural resident's income growth and change rural residents'consumption habits; at last, improve the consumption facilities and rural consumption environment.