Abstract: This paper builds the spatial panel model to analyze the spatial correlation between the output in financial support for agriculture and the incidence of poverty in all of China’s provinces from 1993 to 2012 and applies threshold panel model to study the threshold characteristics of the poverty reduction effect in public financial expenditure. The result shows the poverty reduction effect of financial support for agriculture is obvious. Financial support for agriculture and the incidence of poverty is non-equilibrium distribution in the space and the poverty reduction effect of financial support for agriculture has spatial heterogeneity. The elasticity of the poverty reduction of financial support for agriculture in northwest and southwest is large, while it is small in southeast and north. The result of threshold test shows the elasticity of the poverty reduction of financial support for agriculture increases and then decreases with the increase of rural per capita income of farmers. Conclusions In this paper have obvious implications in adjusting and improving the policy in financial support for agriculture. When the central government encourages and urges local governments to increase financial support for agriculture, the spatial heterogeneity and threshold characteristics of financial support for agriculture should be fully considered. When configuring the financial fund for agriculture, the central government should tilt to the provinces which have strong radiation or their level of rural per capita income of farmers are low, and make sure that the poverty reduction effect of financial fund for agriculture exerts to its best.