Mechanism And Empirical Study On The Modernization Of Agriculture Supported And Promoted By Government Finance

The 18 th National Congress of Communist Party of China has restated the national policy of "advancing China’s i ndustrialization, informati onization, agricultural modernization with Chinese characteristics", "to promote simultaneous development of industrialization, informationi zation, urbanization and agricultural modernization in China". In this process, "agricult ural modernization plays an indispensable key role in synchronizing the four modernizations". Consequently, fiscal support for agriculture as an effective means of promoting agricultural development, undoubtedly provides a crucial base for the realization of agricultural modernization.To navigate effective fi scal support for Chinese agriculture development and enforce its robust performance in promoting Chinese agricultural modernization, this dissertation presents a conclusive analysis on the role of fi scal support for agriculture development and the diverse impact of fi scal support for agriculture on agricultural modernization development.Firstly, under the guidance of the index system of the evaluation of agricultural modernization, the author constructs characteristic connotation indexes of agricultural modernization. Based on the World Bank WDI Database(1960-2012) and through the factor analysis method, the author conduct s evaluation on the development level of agricultural modernization in more than 200 countries and regions. It is found that China’s current agricultural modernization is in the middle of world’s average level. The level of Chinese agricultural science and technology, agricultural production efficiency and agricultural intensity lay on the world’s average level, respectively as 49.5%, 63.6%, 41.1%, far lagging behind the world’s leading level. T he under performing level of agricultural science and technology, agricultural production efficiency and agriculture intensity has become an important factor in restricting agricultural modernization in China.Secondly, through the analysis on fi scal support for agriculture in promoting the mechanism of agricultural modernization, this dissertation systematically analyzes the conduction path through which the fi scal support for agriculture influences agricultural modernization. On one hand, fi scal support for agriculture increases agricultural output and increases farmers’ income. On the other hand, fi scal support for agriculture leverages overall agricultural landscape by promoting agricultural upgrading and agricultural technolog y progress. At the same time, developing strategic direction of fi scal support for agriculture, including agricultural support policies at different stages plays a vital role in environmental protection, agricultural intensity development.Based on the analysis of the status quo of the fi scal support for agriculture(1990-2012 data), this dissertation examines the influence of three channels of fiscal support for agriculture in the four dimensions of agricultural modernization. It points out that different input of fi scal support has different impact on the four dimen sions of agricultural modernization. Agricultural capital expenditure, agricultural science & technology and supportive expenditure and expenditure on agricultural departments are not in consist ence with the development of agricultural technology, agricultural efficiency, agricultural intensity and agricultural ecology. T his finding provides empirical evidence that fiscal support for agriculture effectively promotes agricultural modernization.Further, this dissertation targets its comparison and analysis between the selected developed countries and the developing countries in terms of fiscal support for agriculture development. The results show that the relationship between fiscal support for agriculture and economic development is an inverted U shape and the turning point of this inverted U shape will appear when the agricultural expenditure sits at the range of 5%-8% in GDP. Based on the PSE method through which the internal structure of fiscal policies of various countries is evaluated, the generation is that from a long-term perspective, the producer support equivalence is falling, the consumer support equivalence is rising and the general service support equival ence shows a continued cursive line. T he WTO also requires that fiscal support should be effective and follow internationally recognized rules. Agricultural fiscal support needs to be upgraded from Yel low Box policy, which means direct subsidies to agriculture, to Green Box policy, which means indirect subsidies to technology innovation and environment protection. T his generation is reflected and echoed by the findings of this dissertation.Finally, following the reviewing of related theories and the evidences from this empirical research, the author presents suggestions for t he optimization of fiscal support system and its role in enhancing agricultural modernization, specifically in terms of optimizing the scale of agriculture fiscal expenditure; optimizing the structure of fiscal support for agricultur e and managing the performance target of fiscal support for agriculture.