Logic of Optimizing Incentive System of Building up China's Strength in Agriculture and Its Practical Path

Incentive compatibility is a prerequisite for encouraging farmers in building up China's strength in agriculture. China's agricultural development incentive system has been evolving under the process of "proposing new goals for agriculture - attenuating the marginal function of agricultural development incentive system - existing agricultural policy failure ", and following reform has been generally centered on the two ideas of coordinating the relationship between the government and the market, and identifying the target of incentives. Building up China's strength in agriculture is the long-term goal of China's agricultural development, and the agricultural development incentive system needs to ensure that all agricultural subjects can obtain sufficient benefits in a sustainable manner, but it faces the challenges of balancing diversified goals, taking into account diversified industrial development, and accommodating the coexistence of multiple subjects. In this regard, the general idea of the design of the incentive system is to match the comparative advantages of diversified agricultural subjects with the diversified goals of China's strength in agriculture, to coordinate the relationship between the government and the market with the principle of minimizing incentive costs, and to encourage different regions and agricultural subjects to independently explore the division of labor and channels of income increase in building up China's strength in agriculture. The practical path to realize this institutional design is to promote the agricultural supply-side structural reform, further divide the goals of agricultural power building, and ensure the effective implementation of all incentives.