The Optimization Research On Fiscal Expenditure For Agriculture In Inner Mongolia

Agriculture is the basic industry, and it has strong relationship with the stable operation of the national economy. Agriculture industry has the Characteristics of weak link and public goods, and it is the determinants that the government should set the necessary support and funding. Inner Mongolia is one of the most important bases that produce and process livestock products. The size and scope of agricultural fiscal expenditure is larger and larger in recent years, and it covers Comprehensive Agricultural Development, Poverty alleviation, rural education, Agricultural research and popularization, agricultural infrastructure, rural medical and rural culture. For all that, there are an army of problems on agricultural fiscal expenditure and financial system such as the policy direction uncertainty, the shortage of investment, lax management and so on. As the economy stepped into New Normal, the growth of fiscal revenue became slow and the stress from the growth of agricultural fiscal expenditure also became bigger and bigger. So how to make good use of fiscal expenditure is a big issue to discuss. This paper made an optimization analysis from the size that based on Barro’s A · K model, the structure that based on the theory of welfare and patterns that based on the public goods theory in Inner Mongolia. The mainly conclusion is:(1)In China, almost 90% funds are invested in PSE and 10% is invested in PSSE. In PSE area,79.3% funds is used in agricultural price support; whereas in PSSE area, 36.7% funds is used in agricultural infrastructure and 28.5% is used in the agricultural science and technology system.The sources of agricultural fiscal expenditure come from the central government and local governments that the funds from central government are less than 4%.Compared with the growth rate of the whole country, the rate in Inner Mongolia is much slower. And it leads to the gap of agricultural fiscal expenditure became bigger. The main fiscal expenditure fields in Inner Mongolia are agriculture, forestry and water conservancy. The proportion of these three fields is 78.97% while the total country is 75.69%. In general, the proportion of investment is stable except the water conservancy and rural reform that are present a downward trend.(2)The absolute scale of agricultural fiscal expenditure is bigger and bigger and the relative scale is reach 12%. Based Barro’s model, the agricultural investment is the main factor to increase the agricultural economy without thinking the advances in technology. The agricultural economy will increase 0.2627% when the capital stock increased 1% and the agricultural economy will increase 0.3855% when the fiscal expenditure increased 1%. The theoretially optimum value of agricultural fiscal expenditure in Inner Mongolia is 38.55% (the size of agricultural fiscal expenditure/ the agricultural added value). The gap between the actual value and the theoretical value is bigger and bigger year by year.(3)The main areas of agricultural fiscal expenditure are subsidies, environmental governance funds, infrastructure funds and the administrative fee. This paper constructed a rural welfare index based from the macro and micro perspective and uses the Grey Relational Analysis to make the correlation order between fiscal expenditure and the index. The result is subsidies> non-production infrastructure>the environmental protection funds> agricultural science and technology training fee> production infrastructure> agricultural industrialization> administrative fee. This result means that there is a dislocation between the structure and correlation order.(4)The pattern of agricultural fiscal expenditure is all expenses and part of spending based on the proportion. The main problems of patterns in Inner Mongolia are the majority ways are all expenses, the lack of hierarchy and adjustment. The government should use all expenses ways to support the pure public goods whereas use part expenses ways to support the mixed public goods based on the theory.The policy suggestions of our subject are:Firstly, the government should gradually form a stable growth mechanism through the construction of legal system. And we should integrate the decentralized funds into unified field.Secondly, we should optimize the structure of agricultural fiscal expenditure: increase the scale of subsidies and make some adjustments; increase the fiscal expenditure proportion of protection funds, agricultural R&Ds funds, non-production infrastructure; make the fiscal proportion of production infrastructure and industrialization stable and guide the private to invest; decrease the fiscal proportion of administrator fee.Thirdly, we should understand the main agricultural function in different areas before determine the ways of fiscal expenditure. The government should use the way of all expenses to support the pure public goods and part spending to support the mixed public goods.At last, the governments should perfect the rural financial system, increase support for new agricultural management base, make the clear responsibility between the governments and the market, expand the finance support areas.