Study on Interactive Relationship between Farm Products Trade and Farmers’ Income Growth in China --- Empirical Analysis Based on VAR Model

Through establishing VAR Model, and applying modern cointegration theory and such methods of measurements as impact decomposition, this article probes into long term and short term interactive relations between Chinese farm products import & export and growth of farmers’ income. It is shown, in the long run, a stable equilibrium relationship exists between the three factors, and farm products export is the Granger cause for growth of farmers’ income. In the short run, short term fluctuation of farmers’ income is affected by short term changes of farm products import and export. And influence of short term changes on the part of farm products export is more obvious. Impact decomposition indicates that, impact of growth of farmers’ income has a larger rate of contribution to farm products export and import.