Abstract:Entrepreneurship serves as a good way to solve the problem of unemployment for farmers. And the policy environment can greatly promote the occurrence of entrepreneurial behavior. Based on the survey of 930 rural microenterprises in Hubei Province, we explored the effect of government’s rent- seeking on farmers’ entrepreneurship. The result shows that the additional burden, together with its impact on start- ups, is significantly lower than that for the old companies. This indicates that the preferential policies on farmers’ entrepreneurship have achieved certain effects. We also find that the government’s rent- seeking policy does not affect firms uniformly, showing greater flexibility in enforcement and preference to promising companies with higher levels of regulatory extortion for profits and longer operating life, which impedes the healthy growth of rural microenterprises. Although the withdrawal of the entrepreneur can inhibit the high rent- seeking behavior, it is unlikely to occur under the condition of nationwide enterprise- starting as well as difficulty in entrepreneurial financing. Therefore, to make it easier for the farmers to start up a business, the government should strengthen the legal construction and improve the quality of law enforcement.