Theoretical Analysis And Empirical Study On Contract Selection And Operational Performance Of Farmer Professional Cooperative

By the late 1990s, the agricultural and rural development in China has entered a new historical stage, the market became a main factor that constrained the adjustment of agricultural structure. When facing the new situation of increasingly market-oriented and international in agriculture, the decentralized farmers how to avoid the natural risks and market risks and enter into the market successfully, has become a major issue of agricultural and rural economic development in China. Domestic and international experience shows that, in order to solve the problem, we must rely on the construction and development of farmer cooperative organizations which has the main form of farmer specialized cooperative, to increase the level of farmers'organization. With the the promulgation and implementation of "Farmers'Professional Cooperative Law", farmer cooperatives in China will enter a new stage of development according to the law. Researching on the institutional arrangements and the operational performance of farmer professional cooperatives is significant for improving the efficiency of agricultural operation and increasing the peasants'income.The aim of this study is to further improve the operational performance of farmer professional cooperative. It mainly focus on the two issues in reality:What are the key factors that determine the behavior of contract selection within the cooperative? How about the development law and the internal relations of organizational forms, behavioral characteristics and economic performance in different types of cooperatives? This paper uses the agricultural economics, industrial economics, new institutional economics and econometrics comprehensively. Firstly, it analyzes the dynamic mechanism of the ownership structure's evolution exist in agricultural cooperatives with the main research method of institutional analysis; then, on this basis, it establishes an econometric model of factors that affecting the cooperative'internal contract selections, and gives an empirical test to the model through regression analysis method; lastly, it summarizes the relationships between the structure, the behavior and the performance within farmer professional cooperative respectively through the methods of comparative analysis and case studies, in order to discover the key factors affecting the operational performance of farmer professional cooperative.The innovation of this study may be:firstly, it proposes a dynamic perspective of "contract" to analyze the ownership structure and organization mode of farmer professional cooperatives; secondly, it establishes a expanded "situation-structure-conduct-performance"(SSCP) paradigm to discuss the relationship between the institutional structure and the operational performance of farmer professional cooperatives; finally, it chooses "the contract mode selection" as its research object and quantitatively analyzes the factors affecting the internal contractual modes of farmer professional cooperatives, in order to discover the law of the contractual behavior within the organization.This paper is divided into eight chapters. The main chapters are unified in the basic logic framework of "situation-structure-conduct-performance"(SSCP), the main contents and conclusions of each chapter are as follows:Chapter 1 is the Introductory section. From the realistic background of farmer cooperative development in China, the chapter proposes the purposes and significance of this study, clarifies some confusing concepts, and defines the object of this study, then it proposes the research hypotheses, basic ideas and research methods of this paper, and summarizes the possible innovations and shortcomings in this study.Chapter 2 is the relevant theories and literature review section.The relevant theories part summarizes several new institutional economics used in this study, including transaction cost theory, contract theory and institutional change theory; the literature review part introduces both the research results western agricultural cooperatives has made and the he latest development in cooperative theories home and abroad from the perspective of NIE.Chapter 3 is a theoretical framework about the agricultural cooperatives. Firstly, from the perspective of vertical and horizontal integration, the chapter divides the coordination of the agricultural industrial organization into three kinds:the market mechanism, the cooperation mechanisms and the integration mechanisms, then it gives the comparative analysis of the three; Secondly, the chapter explains Williamson's research on the organization with transaction cost theory, namely, the discussion about the relationships between transaction characteristics, contract forms and governance structure in an organization; Finally, it puts up a "situation-structure-conduct-performance" (SSCP) framework by which this study follows.Chapter 4 is the the analysis of essential attribute and the property arrangements of farmer professional cooperative. This chapter first describes the nature and organizational characteristics of cooperatives (including the subject and object properties) based on the investigation of the evolution of the international cooperative principles; then, respectively, it analyses the general characteristics and types of ownership structure in agricultural cooperatives from the perspective of both horizontal and vertical comparisons; Finally, the chapter analyses evolution trend of ownership structure in traditional cooperatives and the phenomenon of deviation from this structure in depth with the institutional change theory. It argues that it's the internal institutional defects in traditional agricultural cooperatives, such as low efficiency in decision-making process, financial constraints, etc., that enables the organizational institution to change, further more, in the back of these innovative behavior, the relative factor price changes was the root cause of initial institutional change and the preferences of the innovators may affect the marginal institutional adjustment through the subjective model.Chapter 5 is the analysis of contract selection of the farmer professional cooperative. Based on the reality of cooperatives'development in China, this chapter analyses and compares two different types co-exist within the cooperatives:commodity contract and factor contract from the perspective of the contract selection. To the question of which types of contracts to choose, the paper introduces the transaction cost factor into the expanded theoretical model and establishs a new explanatory model. The meaning of this model is that the relevant factors of institutional structure may directly affect the contractual arrangements within organizations, meanwhile, the organization's institutional arrangements must be compatible with the trading environment, to avoid the excessive transaction costs. Through the empirical study on 98 farmer cooperatives in Ganzhou, Jiangxi Province, it founds that the organizational structure factor of cooperatives has a significant effects on the behavior of contracts selection; in terms of environment which the cooperatives lives in, all the factors have not significant effects on contracts selection except the government support factor; in terms of transaction costs, both the negotiation cost and the monitoring costs are significant in affecting the contracts selection, but the effect of the information cost is not revealed.Chapter 6 is the performance evaluation of farmer professional cooperatives. This chapter first designs 13 indexes from the aspects of organizational benefits, membership benefits, internal governance, development potential and social impact, as the basis of performance evaluation index system of farmer professional cooperative. After determining the weights of all indexes with subjectivity of AHP, the paper ranks and evaluates the performance of the 40 sample cooperatives investigated Ganzhou, Jiangxi Province by the performance evaluation index system. The empirical results show that the overall performance of farmer professional cooperative is in a medium or lower-level; the cooperative has a certain income-generating capacity in the aspect of both the organization itself and its members, but the internal governance structure is not perfect yet; the current cooperative is in the early stages of development, though its competitiveness is still weak, it has strong potential for future development. Then, the paper uses factor analysis to test the system. The results shows that the classification of the factor level in this study is generally reasonable, and the established performance evaluation system of cooperatives are basically reasonable and feasible. Finally, the paper compares the differences in organizational forms, behavior characteristics and economic performance of three different ownership types of cooperatives, and summarizes the internal relations of them. Then it concludes that when judging whether an organization is efficient or not, one should not only according to its organizational form or ownership structure, but also depends on the appropriateness of the institutional arrangements within the organization and its compatibility with the external environment.Chapter 7 is the international experience and enlightenment from the development model of farmer professional cooperative. This chapter comprehensively studies the agricultural development model in France, Japan and the United States and other typical developed countries. It analyses, compares and outlines their characteristics in organizational structure, main business and operational mode. Then based on these successful experiences, it puts forward some enlightenment to the development of farmer professional cooperative in China.Chapter 8 is the conclusions and policy recommendations. This chapter summarizes the main conclusions of the full paper, and combining with these research findings, it puts forward corresponding countermeasures from the aspects of the internal institutional arrangements, the external institutional environment, the quality improvement of members, the joint between the organizations, and the government guidance by classification.