The Impact of China's Fiscal Expenditure in Agriculture on Farmer’s Income

Based on the account of the vital role which the national finance played in supporting agriculture, the thesis presents the current situation of financial support for agriculture in China, in terms of the limited scale and irrational structure of financial support expenditure in agriculture. On the basis of the brief introduction of the current level of Chinese farmers’ income, the thesis discusses the effects of scale and irrational structure of financial support expenditure in agriculture on the farmers’ income, according to the related data of financial support expenditure in agriculture and rural per capita net income. The results indicate that the calculating regression equation has a remarkable explanation power, reflecting the positive role of financial support expenditure in agriculture played by national finance in increasing the farmers’ income. As regards the structure of financial support expenditure in agriculture at present, according to the proportion from high to low, the expenditure primarily consists of three parts from high to low in sequence as follows: productive expenditure and funds for public undertakings, capital construction expenditure, and rural relief expenditure plus science and technology funds. Such sequence deviates from the marginal production effects of financial support expenditure in agriculture and the correlation of farmers’ income, which demonstrates the severe irrationality of the structure of financial support expenditure in agriculture. Corresponding countermeasures are put forward as follows: on one hand, we should continue intensifying the efforts to support agriculture financially in order to form a regular increase mechanism; on the other hand, we should adjust and optimize the structure of financial support expenditure in agriculture, and further crystallize the investment flows.