Based on the panel data of 28 provinces (cities and autonomous regions) from 1997 to 2018, the regional differences of farmers’ income have been analyzed by using Gini coefficient, Theil index and MLD. By using Shapley value decomposition method, the factors affecting the regional differences of farmers’ income under the distortion of factor market have been decomposed and the contribution degrees of them have been measured. The study has shown that the regional difference of farmers’ income is increasing year by year. Although fluctuating, the overall value tends to reach the warning line of international income gap. The distortion of factor market in different regions has a significant negative impact on the growth of farmers’ income. The rural human capital, the scale of rural financial development, the openness of agricultural trade, the level of agricultural scale management, the level of regional industrialization and the adjustment of agricultural related policies have a significant positive impact on the growth of farmers’ income. The distortion of factor market is the first factor that causes the expansion of regional differences in farmers’ income, and the adjustment of agricultural related policies is the only factor that reduces the regional differences in farmers’ income, while the other factors have expanded the regional differences in farmers’ income to a certain extent.