Study On The Relationship Between Rural Financial Development And Farmers’ Income Growth In Zhejiang Province

The problems of peasant are the core of the issue of farmers, and income problems are the key to solve these problems. Solving the resource allocation problem is important to solve the income problems of farmers. Rural finance in rural areas played a crucial role in economic development. However, there was financial repression in rural areas, then financial services can not meet the "three rural" development needs and in turn inhibited the growth of peasant income. How to deepening financial, removing financial repression for improving income and its growth rate, and increasing peasant incomes become a major practical problem, which needs our attention and research.In this paper, based on the perspective of the relationship between rural finance and peasant income growth, the rural financial development and farmer income growth were analyzed. Long-term relationships between rural financial development and income growth of farmers were investigated using unit root test, cointegration analysis, error correction model, Granger causality test and other methods, while conducting an empirical study of Zhejiang province. Then Describing the development of rural finance" negative aspects for income growth, some suggestions were putted forward.The results showed that:(1) Farmers’savings deposits increased year by year in Zhejiang, but farmers deposit was the main driver of rural finance. Agricultural loans and rural enterprises loans increased year by year. Farmer per capita net income of the total volume has increased significantly In Zhejiang, but the growth rate was different in each stage. Taking Zhejiang as a whole, wage income and household income of farmers operating income were the most important component of farm income. Farm income was still an important source of income for farmers in Zhejiang. (2) Rural financial development and Income had long-term equilibrium cointegration relationship in Zhejiang Province by cointegration testing and error correction model. Rural financial development, the income of peasants maintained the first-order cointegration. Zhejiang rural finance development had sustainability in the long run, but also positive role in promoting income of peasants and rural economic development.(3) Granger causality tests showed that financial development in rural areas and farmer income growth had causal relationship, financial development in Zhejiang Province promoting income growth of farmers. Rural deposits were Granger cause for per capita net income of farmers, and rural credit for farmers also affected income.(4) The support of rural financial development to farmer income growth was ineffective. Farmer income growth was constrained by unreasonable rural financial institutions setting, insufficient funding and inefficient rural financial.Rural financial development was realized by establishment of a sound, diversified rural financial service system, strengthening the rural financial product innovation, fostering efficient operation of rural financial markets, optimizing the benefit of rural financial institutions in the standardization of the environment, improving the rural financial market competition mechanism, the establishment of rural flow-back mechanism to reduce the loss of rural finance, and to achieve a virtuous circle of support for agriculture and other means, and so on. Then, it increased the income.