Study In China’s Rural Water Conservancy Projects Investment Effect On Crop Technical Efficiency

Rural water conservancy projects investment concerns not only the financing instrument but the key element to boost crop industry whose production system and performance varies according to the former. And the funding of rural conservancy projects is deeply affected by crop devolepment at the same time. Considering that the investments in China are still provided mostly by governments, leveling up crop production capacity and ensure food safy from rural water conservancy projects investment policy persperctive are of great significance in theory and practice.To analyze the influencing mechanism inside the two, this paper proposes a hypothesis based on the endogeneous growth theory that agricultural production,especially in crops, is endogenously related to rural water conservancy projects investment. After obtaining crop technical efficiency, this assumption is well justified by strict instruments variables and endogeneity tests using China’s provincial panel datas from2003to2010. Then this paper finds out serval vital determinants of rural investments tendency towards water conservancy projects with tobit model.And econometric analysis makes it clear that rural investments tendency towards water conservancy projects is one of the crucial factors affecting crop technical efficiency:while the developed rural areas, which take this endogeous advantage naturally, has devoloped a virtuous circle between the two, the less devoloped suffer a lot in crop production due to under-capitalization in water conservancy projects. Our study also shows serval related keys to improve crop production in backward area:(1)enhancing investments tendency towards water conservancy projects;(2)changing crop farmers deep-rooted investment preference in residential buildings gradually;(3)increasing investment in ancillary facility of irrigation area to link up rural water conservancy investment and crop production more effectively. Our finding also provides some useful clues in rural water conservancy projects investment reform and crop production improvement.