On Rural Household Agricultural Long-Term Investment In China

China's economy has been keeping on high developing during last twenty years, and has achieved remarkable success. However, development speed in rural China, agriculture and farmers is different from the whole countries' economic development. In recent years, increasingly problems revealed, such as, farmers earn little than workers, so gap between town and village becomes more and more broad; foodstuff yield pace up and down because of short of long-term investment in agriculture; country entironment become worse, and more and more land deserted.In the face of series issues in rural China, the Party and State Department thought much of it. The Sixteenth Plenary Session of the Fifth Central Committee of the Communist Party of China made with a strategy disposal, namely developing and planning town-and-country as a whole, constructing socialism new country, besides continuously issued four No. 1 files which concerned with "San nong" in recent 4 year. In order to develop and plan town-and-country as a whole, construct new country, we must invest in agriculture and country a lot besides system incent. It is essential that how to incent farmer, as a principal part of constructing new country, invest in agriculture and country. It is critical factor that concern with continuous development of agriculture and country, with constructing new country, developing and planning town-and-country as a whole, and solving "San nong" problems in China,This thesis reviewed Keynes's and classic investment theory, cultures of rural household investment and real option analysis. Those cultures focused on land property and agricultural long-term investment relationship, and most researches thought stead land property prompted rural household long-term investment. Otherwise, because of different view point of researchers or different development level in different areas, some researchers drew different conclusions. At present, the cultures analyze rural household investment decision with net present value (NPV) , which ignore real option of agricultural long-term investment.By analyzing China's rural land system transition and present situation, we found that rural land collective system, which ownership is fictitious, had resulted in lacking of agricultural long-term investment and worsen agricultural environment. Rural land second round contract have specified rural land thirty years of period of validity, which eased up contradiction of fictitious ownership in some degree, but did not solve the problem ultimately. Farmers didn't increase their agricultural long-term investment. We draw an conclusion that premise of rural economic sustainable development is increasing long-term investment on agriculture , by analyzing relationship among rural land collective ownership, agricultural long-term investment, and agriculture and country economic sustainable development. However, farmers have no confidence on long-term investment which keeps agriculture sustainable development, and almost all farmers prefer short-term investment on agricultural production. We also analyzed farm household long-term investment behavior after household responsibility system, and we found that farmer's production investment factual increasing ratio less than nominal increasing ratio. Proportion of farmers' non-agricultural investment increased gradually in farmers' agricultural production investment. Since 1988, farm household agricultural production fixed investment increasing ratio or proportion in agricultural production investment has stagnated in any case.By analyzing characteristics of agricultural long-term investment, we found real option value of agricultural long-term investment, so real option method can explain farmers' investment behavior better. By using real option method, we figure out critical point which farmers began agricultural long-term investment. Under condition of stratification of rural China and unbalance development of different areas, by using panel data method and data from fixed observation areas in rural China, this paper empirically studied on agricultural long-term investment behavior of different social stratification and in different areas. It concluded that different social stratification has completely different investment behavior, farmers' agricultural long-term investment has direct proportion to their income, but increasing ratio of investment descend along with its income rank. Farmers in different areas also have different agricultural long-term investment behavior, but the difference only shows in lever of average agricultural long-term investment. Farmers in west China invest most among three parts, which achieve 5. 2, and the next is farmers in middle China, the least is farmers in east China, who invest only 4. 3. Increasing ratio on agricultural long-term investment along with its income increasing is same, which is 0. 056%, in three areas.In the end, according to foregoing conclusion, the dissertation put forth measures to incent farmers' agricultural long-term investment under constructing new socialism country, namely setting up and completing rural property system, completing rural land market, promoting agriculture intensive cultivation in proper sequence, intensifying industry nurturing agriculture, and constructing new rural finance system in order to widen low-income farmers' financing channel.