Research On The Relationship Between The Western Agricultural Public Expenditure And Rural Economic Growth

Since the reform and opening up, Chinese agriculture and Chinese rural economy has made tremendous development, the agricultural comprehensive production capacity has been improved significantly, rural living standards has been raised obviously. At the same time, Chinese economic development comes into the stage of “industry nurturing agriculture, city supporting rural development”. Our country continues to increase public spending on agriculture, agriculture and rural economy have made great progress, and the farmers’ living standard has been improved significantly, but there are some severe problems in the financial policy guidance. That is to say, our country lays stress on industry at the expense of agriculture. Agricultural public expenditure has many problems such as the low efficiency of public expenditure and differential development in the public expenditure efficiency, which lead to slow development of agricultural modernization and unbalanced regional development.Western agriculture is the basic industry of western economic development, which provides the material guarantee for the development of the secondary and tertiary industries. Meanwhile, Chinese west countryside offers a broad market to the development of other industries. With the advance of the Great Western Development and the construction of new socialist countryside, western agriculture and rural economy have made eye-catching achievements. Farmers’ income has increased, agricultural comprehensive production capacity levels have been improved, and grain yield has been largely increased, which contribute to the rapid development of the whole western economy. But in recent years, the impact of the international financial crisis on China causes many new problems in the agriculture and the rural economy operation. The prices of agricultural products decline, exports are suffocated, a large number of migrant workers return. It is more difficult to stabilize the production of main agricultural products such as grain. It is not optimistic to increase the farmers’ income and to develop agriculture and rural economy. In this situation, western agriculture is not only a weak link in the economic development of the western region but also lag behind national development. So the government must strengthen the support and protect of agriculture, and protect the basic position of agriculture. Throughout the world, other countries often use government funds to support price protection, and use direct subsidies or other ways to support agricultural production, so as to protect the income of farmers. In the same way, our government should also provide the necessary institutional guarantee for the development of agriculture and rural economy. Agriculture as a basic industry in the West which supports rapid economic development in western China needs substantial support from governments at all levels.Accordingly, in this thesis the author refers to the theory of the relationship between the agricultural public expenditure and the rural economic growth. Based on the existing literature search, the author analyzes the relationship between the agricultural public expenditure and the rural economic growth in western rural area, which is of great theoretical significance and practical value. After that, according to the relevant data from 1981 to 2012, the author analyzes the relationship between the agricultural public expenditure and the rural economic growth in different periods or in different stages of the same period. The result of the study shows that the agricultural public expenditure and the rural economic growth change synchronously in the same stage. And then the author checks the relativity and causality of the agricultural public expenditure and the rural economic growth through the empirical study. The author also proves there is a strong correlation between the agricultural public expenditure and the rural economic growth based on Grey Relational Grad Analysis. In light of the above analysis, the author further proves there is a long-term stable relation between the agricultural public expenditure and the rural economic growth. At the same time, the author applies the economic model to analyzing the contribution rate of the agricultural public expenditure to the rural economic growth. In order to probe deeply into the relationship, the author uses unit detection, co-integration and Granger causality test to check the causality between the agricultural public expenditure and the rural economic growth in western China. Finally, according to the result of the empirical research and the specific circumstances in western China, the author puts forward some feasible policy suggestions to support the agriculture and rural economic development in the western region.