The Hysteresis Effect And Influence Path Of Water Investment On Agricultural Economics Growth

As an infrastructure, water project has strong externalities. It not only plays an essential role in insuring agriculture production, but also is a substantial factor in modernizing agricultural. The ability to withstand disasters is gradually decreased in agriculture mainly because of contradiction between water supply and demand, lack of construction in irrigation, low water investment and weak water facilities. And agricultural economics growth is impeded by these issues. Food safety is facing the threat of the poor resource of cultivated land and the sharp decrease of water, which results from industrialization. In order to solve this problem, “No.1 document” of central government(2015) called “some suggestions of increasing the force of reform and innovation and accelerating agricultural modernization drive ” emphasis on putting plough improvement into effect, developing water-saving technologies, pushing on the modernization construction of irrigated area and enhancing small-sized water facilities. It is necessary to study the effect of water investment on agricultural economics growth and improving the quality of arable land under such policies.Semi-arid areas such as Shaanxi province,its agricultural economic development heavily dependent on large-scale water projects investment.Therefore,based on time-series data of Shaanxi province during 1982-2011,this study analyzed the situation of water investment in Shaanxi at the beginning.Then,the relationship between water investment and agricultural economic growth was verified through the co-integration test and the Granger casualty test. After that, the polynomial distributed lag model was used to empirical analyze the impact of every water investment on agricultural economic growth and inspect the change of this effect of the lagged variable. At last, the study demonstrated if water investment have indirect effect with the help of improving the quality of arable land.The basic conclusions show as follows:(1)Although the total amount of water investment is witnessed a sustainable growth in the past few decades, the scale of investment is low. The situation that investors mostly are constituted by governments has not changed;(2)there is a long-run equilibrium relationship among gross output value of agricultural production, the number of labor in agricultural sector, area of cultivated land, total agricultural machinery power and water investment in Shaanxi Province. Also, the increasing water investment is the Granger cause of the agricultural economic growth, but this influence have a certain lagged effect.(3)water investment could significantly promotes agricultural economy at the third year after they have been applied.Furtermore, this impact will reach the top at the fifth year and go down the sixth year.The dynamic elasticity of water investment against agricultural economics growth was 1.204, and long-run elasticity is 1.256;(4) water investment is one kind of technology of which result is equivalent to the benefit of land expansion, and it can promote agricultural economy growth through the effect of cultivate technology.According to the conclusion mentioned before,this paper provided some suggestions including establishing the modern mechanism of steady growth on water capital,increasing investment in small-scale irrigation facilities,developing the technology of agricultural irrigation and making effective complementary between water capital and land.