Agricultural and rural development and farmers’ income growth critically depend on sustained capital investment in rural areas. Given the constraints on farmers’ own capital and public fiscal resources, mobilizing social capital to invest in agriculture and rural areas has become a key policy orientation and a crucial condition for promoting farmers’ income growth. However, existing studies remain divided on how social capital investment affects rural household income.

Taking the policy of “Ten Thousand Enterprises Help Ten Thousand Villages” (TEHV) as a specific form of social capital investment, this paper builds a household decision-making analytical framework and employs a DID approach with data from the National Fixed-Point Survey to systematically examine its impact on rural household income. The results show that the TEHV policy increases the income of beneficiary households by 5.54%. This growth is primarily driven by agricultural operating gains, resulting from both higher agricultural returns and increased inputs of production factors by rural households.

This paper has the following contributions: First, it systematically examines the mechanisms through which the TEHV policy affects farmers’ returns by inducing growth changes across sectors and reallocations of production factors. Second, by analyzing the distribution effect of the policy, it shows that directing social capital investment toward modern agricultural development facilitates inclusive growth. Third, it further illustrates how income improvements induced by enterprise assistance are transformed into enhanced quality of life and capability accumulation, thereby situating farmers’ income growth within a broader framework of economic welfare.