Government Expenditures On Agriculture Cost - Benefit Analysis

I. Why Cost Benefit Analysis (CBA)China is a big agricultural country in the world, and the agricultural sector plays a very important role in our social and economic development. However, there are still many dilemmas and problems in the field of agricultural and rural economic development, such as poor agricultural infrastructure and difficulties in increasing farmers' income. Thus, it is a big challenge for China to deal with the issues of agriculture, countryside and fanners (so-called 3 agricultural problems) in the course of building a wealthy society, and it is an important task for the government to spend more on agriculture in the near future.Two problems must be solved in order to bring this fiscal policy into effect. First, increase the volume of total government expenditure on agriculture. Second, improve the efficiency of government funded agricultural programs. Due to the limit of government funds, the share of total agricultural expenditure in GDP can only increase on a gradual basis. So it is more important to improve the efficiency than to increase the volume of total expenditure. In fact, low efficiency is common among the agricultural projects funded by the government. The relevant parties often pay more attention to receiving government fund than to using the fund efficiently. Meanwhile there are no systematic methods for measuring such benefits and costs. The waste of money resulted from low efficiency makes the situation worse. Therefore, it is quite necessary for the government to build up a standard, safe and effective management mechanism to improve the efficiency of agricultural expenditure. Efficiency becomes the core of agricultural expenditure.Better decision-making is a precondition for more efficient agricultural expenditure. In other words, it is necessary to evaluate the net benefits in the process of agricultural funds allocation. To do so, a scientific, consistent and effective set of...