Research On The Legal System Of Farmers’ Fund Cooperative Organization

As a country with a large agricultural population, the largest legal issue China faces currently is still about farmers’ rights. Since farmers, as the largest group of laborers in China, have been at the least significant end of the distribution series of economic surplus for years, which is an inevitable result caused by the accumulation and distribution of economic surplus under the market mechanism dominated by capital, thus the accumulation and distribution of economic surplus is the core problem of the current predicament, namely rural issues concerning “agriculture, rural areas and farmers”. As an important form of agricultural cooperation, farmers’ fund cooperative organization is a correction of the market-oriented allocation mechanism of financial resources. However, farmers’ fund cooperative organization is by no means a direct derivative caused by commercial financial market mechanism’s rejection of rural issues concerning “agriculture, rural areas and farmers”, instead, it is a new financial resources allocation method dominated by farmers under the condition of agricultural cooperation, it is cooperative credit, a new form of credit that came into being based on the production of agricultural commodities, it is accordingly a new mechanism of agricultural surplus accumulation.Since 2008 when the worldwide financial crisis broke out, China’s industrial and commercial system which develops mainly with the support of commercial finance has gradually stepped into the relative overproduction stage, the industrial capital accumulation model that used to enjoy high growth during the past few decades has gradually entered into a highlighted predicament, the rural economic relationships thereupon are facing a profound reform and the corresponding financial law system will also been greatly adjusted. Based on the labor theory of value, the paper analyzes and studies the basic context and legal dilemma that enables the generation and evolution of farmers’ fund cooperative organization from dimensions like capital, status, contract, financial alienation etc., and comes up with a conception to improve the legal system for farmers’ fund cooperative organization in China by combining investigations and surveys. The paper argues that the legal system of farmers’ fund cooperative organization derives from the capitalization of cooperative fund. Due to the capitalization of cooperative fund, there are interest conflicts among organization members upon the residual claim right and the folk law fails to adjust the conflicts, thus national legislation needs to be introduced to regulate them. While, according to the legal principle, mutual assistance is a contract above status, the unity and opposition of status and contract is not only the internal mechanism of the legal system of farmers’ fund cooperative organization but also the reason why the legal system of farmers’ fund cooperative organization takes the fund cooperation right as the core. While the specific condition and realization degree of the fund cooperation right are ultimately determined by the agricultural operation pattern.At present, the top issue legislation faces is how to solve the problem, relatively high cost of farmer organizations, for it is the key factor that makes the governance mechanism inside farmers’ fund cooperative organization hard to run and leads to serious alienation of the cooperative fund. Thus, there are two basic trends in farmer’ fund cooperative organization, namely the trend of cooperative finance or alienated commercial finance. Currently, the majority of farmers’ fund cooperative organizations are actually commercial lending companies under the name of “fund cooperation”. As a result, the legal system of farmers’ fund cooperative organization faces plenty of predicaments which are closely related to the family decentralized operation pattern of agriculture. Therefore, when it comes to the design of the legal system, priority should be given to the development of village-level farmers’ fund cooperative organizations on the basis of respecting the unified management right of rural collective economic organizations, thereby use villages’ current governance mechanisms to reduce the cost of farmer organizations and construct diversified basic level subject systems for farmers’ fund cooperative organizations in China. Meanwhile, relevant legislation should be improved in aspects like market access, legal person property right, internal governance, risk prevention, government regulation etc. In addition, dominated by capital, farmers’ fund cooperative organization will inevitably become a commercial finance movement which in essence rejects farmers and even might evolve into an illegal fund-raising tool or organization that gives loans at a usurious rate of interest, thereby it is likely to be cracked down.In addition to the introduction, the paper is divided into five chapters.The first chapter is about the theoretical basis of the legal system of farmers’ fund cooperative organization. This chapter mainly explains the connotation and nature of farmers’ fund cooperative organization, the basic composition and formation basis of its legal system etc. When it comes to the legal nature, farmers’ fund cooperative organization should be determined as the mutual-benefit legal person. Accordingly, since the legal system of farmers’ fund cooperative organization takes the fund cooperation right as the core, thus its composition can be deconstructed from perspectives such as the basic content, realization mechanism etc. of the fund cooperation right. As for economic root, the legal system of farmers’ fund cooperative organization is related to agriculture’s characteristics, family operation pattern and commercial finance’s rejection of rural issues concerning “agriculture, rural areas and farmers”, and it is even more closely related to agricultural cooperation. At the same time, by illustrating the legal basis for the generation of the legal system of farmers’ fund cooperative organization from the relationship between status and contract and the prevention and governance of financial risks, the paper concludes that “a contract above status” is not only the internal mechanism of the legal system of farmers’ fund cooperative organization, but also the fundamental reason why it takes the fund cooperation right as the core.The second chapter is about an overseas inspection of the legal system of farmers’ fund cooperative organization. From the angle of comparative analysis, the paper introduces the evolution of farmers’ fund cooperative organization and its legal system in developed and developing countries or regions overseas, reveals main features, general rule and new tendency of the legal system of farmers’ fund cooperative organization in foreign countries and their enlightenment on China.The third chapter is about the historical development of farmers’ fund cooperative organization in China and its legal system. By systemizing the historical context of the development of China’s farmers’ fund cooperative organization from a longitudinal angle, the paper reveals the basic rule of the evolution of China’s farmers’ fund cooperative organization and its legal system, investigates experience and lessons drawn from rural cooperative fund association, introduces the ten-year evolution history of farmers’ fund cooperative organization and its legal system, and especially recommends the “Hetang Experience”, the successful experience of Hetang, a village in Henan Province, in developing farmers’ fund cooperative organization.In the fourth chapter, the paper presents realistic difficulties faced by the legal system of farmers’ fund cooperative organization in China. With investigation and survey combined, by empirically investigating the development status of China’s farmers’ fund cooperative organization and legal difficulties it faces, and analyzing them in aspects such as legal nature, internal governance, credit mechanism, risk prevention, government regulation etc., this chapter concludes that financial selfish departmentalism, commercial finance selfish departmentalism, supervision selfish departmentalism and the policy of non-interference are important factors that land the legal system of farmers’ fund cooperative organization in deep trouble.The fifth chapter improves the legal system of farmers’ fund cooperative organization in China. Based on the above four chapters, this chapter responds to the legal system difficulties mentioned in the fourth chapter by presenting a constructive framework to improve the legal system of farmers’ fund cooperative organization in China in aspects like establishing the subject system of farmers’ fund cooperative organization, reconstructing the property right system of legal person, improving the internal governance structure, building mutual financing legal system, completing risk prevention legal system, improving supervision legal system etc. Among them, three propositions are particularly discussed: First of all, priority should be given to the development of village-level farmers’ fund cooperative organizations and the collective participation of villages should be encouraged so as to establish village-level farmers’ fund cooperative organizations on the basis of the unified management right of rural collective economic organizations; secondly, the national agricultural cooperative bank system should be constructed so as to provide an institutional platform for state credit to support the development of farmers’ fund cooperative organization; thirdly, allow human resource shares to be established, take example by the incentive mechanism in rural governance and corporate governance system, and promote the sound development of farmers’ fund cooperative organization.In conclusion, the paper makes a brief summary of main viewpoints, possible innovation points and deficiencies of the study, and makes a prospect about development of the legal system of farmers’ fund cooperative organization.