Abstract:Based on the division theory and statistics from 1995 to 2011,this paper uses cointegration and variance analysis to study the inherent mechanism of promoting rural economic development.by farmer entrepreneurship.The result shows that farmer entrepreneurship can effectively promote the evolution of agricultural division,and transaction efficiency can also promote rural labor division,but its effect is weak.Farmers Entrepreneurship made great contributions to the increase of farmers' income.and agricultural productivity,while division has the significant effect on promoting farmer’s income and increasing agricultural productivity,but the adjustment of transaction efficiency is weak.Consequently,this paper proposes the following policy suggestions:first,farmer entrepreneurship should be along the path of the specialized operation which should be developed from resource advantages,farmer’s skills,unique management network.As policy makers,the governments should improve the farmer entrepreneurship environment from improving the trade efficiency.