Research On Contract Selection And Efficiency Of Commercial Breeding Of Crops

The public research institutes have maintained a central role in the seed industry innovation system for a long time, and they were dedicated to innovation and application of crop breeding technology. Therefore, public research institutes have most of crop breeding resources. To ensure the stable technology supply, private seed companies have to establish long-term and formal commercial breeding cooperative relationship with scientific research institutes. Meanwhile, it is impossible to write a contract which can specify all the probable aspects of the rights, responsibilities and interests of both sides, it is simply too difficult to anticipate all things that may happen. The opportunistic behavior by the both sides will erode even break up the partnership. And it may fail to reach the efficiency of the collaboration between both sides. This paper argues that if they can design a strong, enforceable contract,the opportunistic behavior may not happen, and this will be to address cooperative relationship failures. This paper provides an analysis paradigm namely incompleteness of contracts--- selection of contracts--- efficiency(I---C---E). It studies deeply on the crop commercial breeding technology and transaction attributes, and tries to explore the regularity of the development of commercial breeding institutions. At last, feasible suggestions are supplied to improve the development of modern crop seed industry. Main points are as follows:(1) Analysis paradigm. On the basis of the property right theory and transaction cost theory, this paper firstly puts forward the analysis paradigm, namely incompleteness of contracts--- selection of contracts--- efficiency. Based on the above analysis paradigm, the optimal contract is to reduce the incomplete contracts efficiency loss to maximum extent.( 2) Analysis on the incompleteness of crop commercial breeding contract. this paper studies on the crop commercial breeding technology and transaction properties, which include asset specificity, public goods attribute of breeding technology, poor technology transferability, and uncertainty in technology innovation process. Transaction costs arise from the description and specification in the transaction, because breeding technology is nonappropriable, many important information is not contractible, and innovative effort is not imperfect substitutable. Incomplete contracts caused the opportunistic behavior, such asinformation leakage, technology imitation and project cross-subsidization, which can hinder the implementation of contract.It is important to design the corresponding coordination mechanism to compensate for the loss of efficiency in breeding cooperation. This coordination mechanism mainly includes the property right structure, the reward structure and the reputation(relational contract), and the different coordination mechanism defined the different contract.(3) Selection of the optimal contract mode for commercial breeding of crops. By using the relational contract model, the applicable boundary is discussed under the condition of cooperative contract for commercial breeding of crops. Under the condition of single phase game and repeated game, trading contract model is difficult to effectively reduce opportunistic behavior between scientific research institutes and enterprises, which can only achieve the second-best efficiency. In repeated game conditions, if both parties have enough patience for the value in future cooperation, reputation mechanism will play a role, relational contracts are better than single phase trading contract. However this discount rate depends on the opportunity cost of relational contracts, when the difference of new varieties are small,single period trading contracts can be profitable, the opportunity cost is too higher to maintain the discount rate at a level below the critical discount rate.The main influencing factors of applicable boundary are the strength of plant variety protection and the substitution of breeding effort. When the strength of plant variety protection is low, the common breeding,delegated breeding and anti-vertical integration relational contract also can achieve the optimal efficiency. Under the same condition, with the increase of the substitution of breeding effort, the two parties of the contract select the contract in the order of anti-vertical integration relational,common breeding and delegated breeding contract.(4) The efficiency of commercial breeding cooperative behaviors. This chapter carries on the empirical research by using Structural Equation Model on the influencing factors of the selection of the optimal contract mode for commercial breeding of crops, and verifies the path of the realization of the contract coordination mechanism. In this paper, the agent satisfaction is used to reflect the efficiency of commercial breeding cooperative behaviors. Three influencing satisfaction factors are classified: expected return factor, contract level influencing factor, and law level influencing factor. Expected return factor mainly includes the indicator variables such as the expected return, pay structure, and new varieties of price,etc. Contract level influencing factor mainly includes the indicator variables such as the cost of transaction risk, adaptive cost bear proportion. Law level influencing factor mainly includes the indicator variables such as the strength protection of new plant variety, protectioncost in case of infringement of right. The study indicates that these three factors on the contract agent satisfaction have significant positive influence. Among these three factors, the expected return factor influences the agent satisfaction most, standardized regression weight reaches 53.0%.