The Analysis Of Rural Finance Development Impacting On Farmers' Income In China

Steady growth of farmers' income in building a harmonious society and promoting sustainable economic development is very important.With the deepening of China's economic system reform,there is a big progress for rural economic development.The institutions of Rural finance increase the credit for township enterprises,and enable the township enterprises develop well,and provide more employment opportunities for farmers,at the same time,there is more opportunity for farmers to get access to education,it causes that many peasants engage in non-agricultural sectors,which makes the employment structure of rural practitioners change,so that the proportion of household income declined,the proportion of wage income increased.This structural change has accelerated the pace of farmers' income growth,the absolute income of rural residents shows sustained growth.However,the volatility of farmers 'income is instability,and there is still large gap between farmers,income and urban residents'income,the growth rate is far below the growth rate of urban residents' income,it shows there are still some problems in the reform process of rural finance,it did not well serve the farmers.Farmers,income cannot grow without the support of rural finance,and it is important to improve the income of farmers if the rural finance system is perfect.By reference to the relevant literature and their model,choosing a number of indicators which are related to the development of rural finance:deposit ratio in rural areas,rural loan ratio,agriculture insurance premium income and agricultural payment amount.By using the application of econometric analysis,the variables selected by unit root test,cointegration test and Granger causality test,studying the development of rural financial impact on farmers' income situation.The results are:there is cointegration in the rural deposit ratio,the ratio of rural credit,agricultural insurance premium,agricultural insurance payouts and the farmers' income.The deposit ratio in rural areas and the agricultural insurance premium income are positively correlated with growth in farmers' income,but the rural lending rate,the agricultural insurance payouts can negatively change the farmers' income.There is granger cause between the deposit ratio in village and farmers' income,but there isn't granger cause between other variables and farmers' income.In view of this conclusion giving some suggestions at the end of the paper that the government departments,financial institutions sector and some other related policies should be implemented from the credit,agricultural insurance,education,in order to raise the level of rural residents' income.