A Study Of The Relationship Between Rural Financial Development And Farmer Income Increase In Shandong

"Three Rural Issues" has been a practical problem to be more concerned about and to be solved by our government, and the core of the solution to the problem is to solve the problem of farmers’ income. China account for the majority of the rural population, the interests of the grassroots has been always to be cared. Since the reform and opening up, Shandong Province has made some achievements in rural economic development, but still far behind the urban economy, the income gap between urban and rural areas has further expanded. Agriculture has always been our important basic industries at this stage, agriculture and rural economic development is related to the level of farmers’ income and social stability.Rural finance is the main source of investment in agriculture and rural economy, and plays an important supporting and guiding role in the growth process of rural economic development and farmers’ income. The level of farmers’ income depends largely on the development of rural finance. With the further deepening the reform of the financial system, and the highlighting "three rural issue", how to establish benign promoted system between the rural finance and the income of farmers is to be solved in the current process of economic development.Foreign scholars study of the relationship between the rural finance and the income of farmers indirectly derived from the study of rural finance and rural economic research, domestic scholars is based on the relationship between them at the national level. In the extremely unbalanced regional economic development of China, it is necessary to research the relationship between them at the regional level. so this paper studies of the relationship between the rural finance and income of the farmers using the historical data of Shandong Province, this study not only enriches the theoretical study of rural finance and the income of the farmers, but also makes some recommendations on the deepened the reform of the financial system.In this paper, on the basis of domestic and foreign scholars, first of all, describes the current situation and problems of rural financial development in Shandong Province with quantitative and qualitative analysis method, the current situation and composition of farmers’ income, and the reasons for the slow growth of farmers’ income; Secondly, on the basis of previous studies, make a descriptive analysis of the relationship between the rural finance and the income of the farmers; Finally, on the basis of theoretical analysis, makes an empirical analysis of the relationship between the rural finance and the income of the farmers-unit root test, co-integration test, granger causality and impulse response. The text is divided into five parts:Part Ⅰ:Introduction. This chapter includes the background, significance of the research, content and methods of the research. Finally, concludes the innovation and inadequacies.Part Ⅱ:Description of the rural financial development and the income of the farmers in Shandong Province. There is a description of the rural financial development in Shandong Province. After, on the basis of the description of farmers’ income status quo, the article makes the analysis of the reasons for the difficulty of increasing farmers’ income at last.Part Ⅲ:A theoretical study of the rural financial development and the farmers’ income in Shandong Province. The chapter analyzes the impact of the rural financial development on farmers’ income from the point of view of the farmers’ income constitution, and analyzes the impact of the fiscal expenditure on farmers’ income.Part Ⅳ:An empirical study of the rural financial development and the farmers’ income in Shandong Province. The article firstly uses the ADF to test the stationarity of the data selected; at the result of stationary indicators, it applies Johansen co-integration test to establish the long-term co-integration relationship between the rural financial development and farmers’ income, on the basis of it, establish vector error correction model to reflect the short-term dynamic relationship between the variables. After a granger causality test, impulse response analysis and variance decomposition, the chapter makes a research of the relationship between the per capita income of farmers and rural financial indicators. Part Ⅴ:Recommendations. The chapter Summarizes and analyzes the previous conclusions, and make policy recommendations based on the conclusions.Through the study of the relationship between the rural finance and income of the farmers, the paper argues that there is a two-way Granger causality between rural financial development and farmers’ income, rural financial development can promote the improvement of farmers’ income, and vice versa, but financial support agricultural spending is not conducive to the improvement of farmers’ income.Compared with previous studies, there are many innovations in the article:first, from the angle of farmers’ income, the paper analyzes the impact that the rural financial development and income of the farmers; second, comprehensively analyzes the main factors that affect farmers’ income increase, considering amount of indicators and qualitative indicators of rural financial development, in addition to the introduction of financial support for agriculture ratios. At the same time, there are many deficiencies:first, we only study rural formal finance impact on farmers’ income, and ignore the impact of non-formal finance; second, the limited nature of the data, the data is a little less relative to the history of financial development, so the results can not be well explained the long-term relationship between the rural finance development and farmers’ income, Pending further in-depth research.