An Empirical Study of Fiscal Support Policy on Farmer´s Income in Major Grain Producing Areas Using Jiangsu as an Example

Government financial support for agriculture plays an important role in both agricultural economic development and farmers´ income growth. However, China´s public finance investment in the agricultural sector has being insufficient and inefficient for a quite long time. Based on the empirical analysis between government expenditure in agricultural sector and from 1985 to 2006 in Jiangsu province, we found the financial support for agriculture is Granger cause of per capita annual net income of rural households, while the contrary is not established. And the short-term elasticity of expenditure on financial support for agriculture for per capita annual net income of rural households is about 0.328, indicating growth in financial expenditure has a strong impact on farmer´s income.