Research On The Financial Issues In The Supplies Of Rural Public Goods In Shandong

Rural public goods for agricultural development has played a fundamental role in helping to increase farmers’ income. With the improvement of farmers ’income, farmers’ quality of life and agricultural production techniques will be increased. Shandong Province, more than half of the rural population of the province’s total population, increasing the supply of rural public goods, to promote the province’s rural economic development is of great significance. Since the reform and opening up, the rural economic development in Shandong \lagged behind urban economic development, rural public goods exist problem of insufficient supply. Effective supply of public goods in rural areas, depend on a steady, stable funding. Generally speaking, funding of rural public goods supply is mainly government financial funds and financial institutions, in the case of limited financial resources, to increase the supply of public goods in rural areas, must increase financial support for efforts.Based on the theory of diversified financing channels of rural public goods, this paper analyzed rural public products supply situation and financial systems in Shandong province. This paper will adopt the dynamic econometric model to research for the real relationship between the two, which is on the basis of data of time series from 1993 to 2014.The results are as following:1. Government as the main supply, in addition to financial compensation, but also non-economic empowerment through institution building, technical support and so on. By introducing Qixia City, Shandong Provincial Water Resources of the Commonwealth of cases to illustrate the problem the government, the private joint supply.2.The main capital of Shandong Province of Rural Public Goods from government funds and financial institutions, which, with respect to the limited financial resources, the financial capital of large scale, the use of flexible. However, the financial system of rural public goods supply is weaknesses in terms of supporting rural. Policy banks bear some of the projects undertaken by the financial resources, which should be diverted to serve rural public goods funds. Forced by the pressure of profit, motivation rural commercial bank insufficient supply of public goods, commercial banks tend to gradually fade out of the rural market. Functions of rural credit cooperatives and other small financial institutions are changing from farmer cooperatives to commercial financial institutions. In the rural areas to provide financial support, not only can not provide loans to the prime rate, but by floating loan interest rates to achieve the purpose of reasonable risk-averse.3.By analyzing the 2008—2015 year loan data in Shandong—rural infrastructure construction loans, farmland capital construction loans and loans to agricultural science and technology—It concluded that:the current financial support for rural public goods, mainly focused on the construction of infrastructure and other hardware facilities, agricultural science and technology and other financial support for the promotion of productivity still insufficient.4.Rural public goods supply has contributed significantly to the increase in farmers’ income. On the one hand, increasing the supply of public goods in rural areas, it is possible to improve production efficiency, reduce production and transportation costs and reduce natural risks. On the other hand, the majority of public goods is a quasi-public goods, which need to charge a fee. Thereby increasing their income levels increase effective demand, also a corresponding increase in the supply of public goods. Income level of rural residents and rural public goods has a positive correlation.5. This paper select the rural residents per capita annual net income in Shandong as a measure of indicators of rural public products supply. It will adopt the dynamic econometric models such as VECM model, to evaluate the co-relations between the two systems. As a measure of rural public products supply, Shandong rural residents per capita net income, marginal impact of rural residents per capita annual net income by the rural finance conversion rate is large. Compared with the rapid development of rural economy, Rural Financial support for rural public goods supply speed is insufficient.Finally, according to the results of empirical research, this paper proposes three policy recommendations to improve the financial support of Shandong Province rural products supply model — adjust the positioning functions of financial institutions, improve the financial operating system, improve risk compensation mechanism.