Panel Study on the Impact of Agricultural Policy-based Finance on Farmers' Income in Counties of Zhejiang Province

Abstract

With the proposal of the rural revitalization and common prosperity strategies, the issues concerning agriculture, rural areas, and farmers have been identified as fundamental problems urgently needing to be addressed in China. Establishing agricultural policy - based financial institutions to provide credit support for agricultural and rural economies is regarded as an effective way to support agricultural development. This paper combines the agricultural credit subsidy theory and the financial technology inclusiveness theory to construct an analytical framework for how agricultural policy - based finance affects farmers' income through multiple paths. It uses a combination of macro - and micro - analysis methods and empirically verifies the research hypotheses. This paper selects a total of 798 panel data from 57 counties (excluding municipal districts) in Zhejiang Province from 2009 to 2022, and adopts a fixed - effects model to analyze the impact of agricultural policy - based finance on farmers' income and its mechanism of action, comprehensively exploring the contribution of policy - based finance to farmers' income increase. The empirical research results show that agricultural policy - based financial credit has a significant promoting effect on farmers' income, and this impact is achieved through both direct and indirect paths. Among them, the scale of agricultural development and the development of rural enterprises are important mediating factors. The former enhances farmers' income level by improving agricultural infrastructure and production efficiency, and the latter further drives farmers' income increase by promoting agricultural industrialization and enterprise development. In addition, the research shows that financial technology plays an important regulatory role in the effectiveness enhancement process of agricultural policy - based finance. By improving credit efficiency, expanding the coverage of financial services, and optimizing resource allocation, it effectively strengthens the income - increasing effect of policy - based finance.