The Technical Progress Of China's Agricultural Machinery Industry And The Impact Of Agricultural Machinery Purchase Subsidy

In order to encourage farmers to use advanced and applicable agricultural machinery,accelerate the process of agricultural mechanization,increase agricultural production capacity,promote agricultural production efficiency and rural income with lower cost,the Ministry of Finance and the Ministry of Agriculture started jointly to implement the policy of agricultural machinery purchase subsidy in 2004.The central government increased the subsidies gradually,and with the intensified agricultural machinery purchase subsidy and the rising labor costs,China's agricultural mechanization has made significant progress in the agricultural machinery industry.Part of the agricultural enterprises produced a batch of high-tech agricultural products through technological innovation,the introduction of technology and independent development.However,compared with advanced countries with strong agriculture industry,there is a lot of issues and gaps to keep up the pace.First,we have a low level of product technology which product structure cannot meet the needs of China's agricultural restructuring.Second,the production equipment is outdated,low-quality,and poor production efficiency.This article calculates the technical progress of the agricultural machinery industry and focuses on the study of whether the implementation of agricultural machinery purchase subsidy policy promoted or inhibited the technological innovation of the agricultural machinery industry in order to evaluate the effect of policy of the agricultural machinery purchase subsidy.In this study,there is much theoretical and practical significance to study the innovative problem of China's agricultural machinery enterprises from the perspective of the agricultural machinery purchase subsidy,but also trying to provide the policy basis for the promotion of innovation and development of China's agricultural machinery industry.In this article we analyze the impact of agricultural machinery purchase subsidy on technological innovation of the agricultural machinery industry utilizing China Industry Business Performance Data from 1998 to 2009 and applying the empirical approaches of SFA(Stochastic Frontier Analysis)and PSM(Propensity Score Matching).Empirical results show:(1)The technical progress of the agricultural machinery industry was increasing gradually but differed in different regions from 2005 to 2009,as well as the enterprises of different ownerships and whether the enterprises have obtained the subsidy or not;(2)The technical progress of those companies who were subsidized decreased significantly compared with the condition of no subsidies from 2005 to 2009,the policy of agricultural machinery purchase subsidy was bad for technological innovation of the agricultural machinery industry;(3)The inhibitory effect to the technical innovation posed by the policy of agricultural machinery purchase subsidy was decreasing from 2005 to 2009.At last,two suggestions have been raised based on the main conclusions of the study.On the one hand,splitting the subsidy funds to sponsor more different institutions and organizations is vital.On the other hand,in order to narrow the gap of technical progress which is posed by characteristics of different regions and ownerships,balancing the industrial resources is also very important.