Research On The Issues Of Rural Financial Development And Farmers' Income

The issue of the "three-agriculture" is directly related to social stability and urban-rural coordinating development; meanwhile, increasing farmers'income is the key to solving the problem of the "three-agriculture". Farmers'income reflects the level of economic development and the degree of marketization. There are many factors affecting the income of the farmers, but financial factor will become increasingly prominent role in the long run. Funds are an important support for economic development. The level of farmers'income can't rise without rural economic development, and rural economic development also can't do without financial support. Under the circumstances of the capital outflow in china's rural areas and the slow growth of farmers'income, we should attach great importance to the support of rural finance, giving full play to its role of credit leverage.In recent years, with the deepening of rural reform, political and academic communities pay more and more attention to the role and status of rural finance in addressing the issue of "three-agriculture". Especially in the context of socialist new countryside construction, the researches of how to choose the breakthrough of a new round of rural financial reform and development, how to build a rural financial service system adapting to the "three-agriculture" development, how to achieve the interaction between rural financial development and farmers'income need further in-depth and expansion.This paper aims to research the important role of rural finance development in addressing the issue of farmers'income growth, using both theoretical and empirical approach, and thus deepen the understanding of the relationship between the rural finance and the "three-agriculture" development. The main contents of this article are as follows:in the first part, we introduce the background and the meaning of this research, recommend fundamental layout and investigative means of this paper, and finally generalize the innovations and scarcities of this study. In the second part, we appreciate the research actuality on rural financial development and farmers'income growth. In the third part, under the institutional background of rural financial development and farmers'income growth, we dissect the relation mechanism of rural financial development and farmers'income growth, and analyze the causes of household credit constraints and the ways of how to break it. In the fourth part, we not only describe the process of change and the characteristics of rural financial development and farmers'income, but also investigate the financing situation of farmers in the rural financial market. In the fifth part, basing on province-level panel data, we use the method of fixed effects estimation to test the effects of rural financial development on farmers'income, and then we use the means of panel cointegration to study the long-run stable relationship and the short-run volatility's influence among rural financial development and farmers' income. In the last part, we propose some recommendations to improve the rural financial development and increase farmers'income, basing on the above analysis.Through systematic analysis, we get the following conclusions: Firstly, the new characteristics of the growth and structure of farmers' income show that the nature of the problem of farmers'income has undergone a fundamental change; the key of financial support for farmers'income growth in rural areas is to develop rural finance and make a contribution to improving rural market economy, changing the methods of rural production and breaking the urban-rural split system. Secondly, through the analysis of related indicators, we find that the function of rural financial intermediation trends to strengthen in agriculture, but it inclines to weaken in rural industry; in terms of rural residents, financial intermediation's function of using savings is very weak, thus financial intermediation's function of rural formal financial system has largely been replaced by non-formal financial system. Thirdly, farmers in the rural financial market are generally facing the problem of financial difficulties, and the main reason is that the rural financial system is still not perfect. This shows that reforming and innovating the existing rural financial system has important practical significance to improve the financing situation of farmers. Finally, the results of empirical analysis which bases on province-level panel data show that rural financial development has important positive effects on the growth of farmers' income, and these effects have regional difference.Compared with previous research, the innovations of this paper are as follows:first of all, on the perspective of this research, considering the regional imbalance of China's economic and financial development, we extends the study of rural financial development and farmer's income from national level to the provincial level. Secondly, in the term of the content in the study, we try to build a basic theoretical framework, and then establish the internal communication mechanism between household credit, technological innovation, the role of rural financial support, and the growth of farmers'income; on the hand, for the characteristics of farmers'income structure, we make a empirical study to research the long-term and short-term impact of rural financial development on farmers'income from household operations and wages respectively. Finally, in the case of the methods having been used, we analysis regional differences and time effects of rural financial development on farmers' income by using panel data and incorporating dummy variables; what's more, we try to use panel cointegration analysis to examine the dynamic relationship between rural financial development and the growth of farmers'income, thereby we overcome the limitations of the existing literature in the ordinary least squares and traditional time series analysis. In a word, this article seeks to make the content systematic, the methods standardized and the findings authentic.