Research On Financing Of Farmer Specialized Cooperatives

The farmer specialized cooperative is an organization which is to solve the conflictbetween household small productions with the ever-changing large markets to decrease therisk and improve a bargain efficiency. During the rapid development, farmer specializedcooperatives have faced the serious fund shortage and financing problems commonly, whichhave strong negative influence on their economic effect. As to these problems, the domesticscholars paid more attention to the macroscopic analysis, and the relevant case study lacksdepth. Based on the past research, this dissertation studies the financing problem from theperspective of equity financing and debt financing.These two financing methods are dividedaccording to the balance sheet.The study not only provides the useful complement to thecooperatives’ financing theory to a certain extent, but also provide reference for governmentdepartment who want to formulate policies about solving financing problem.The thesis takes modern western corporate financing theory, farmer cooperative propertytheory and neoclassical economics theorem as main guidance. According to the thought ofraising, analyzing and solving problems, this paper summarizes fiancing theory and theresearch dynamic of domestic and overseas, bases on fully defining the relevant concepts,statistically analyzes status quo of cooperatives’ financing, concludes the financing difficultyand further analyzes the reasons of difficulty. To solve this problem, this paper draws on thesuccessful financing of foreign experience and deeply analyzes financing structuralcharacteristics of cooperatives in order to get some important clues. Accordingly, and then itproposes solutions to equity financing and debt financing, and finally it is essential to getdirect and indirect financial support from the government to promote financing activitiessuccessfully. In order to increase the persuasiveness of the research, the paper uses themethods of normative analysis, empirical analysis, qualitative analysis, quantitativeanalysis,comparative analysis and case study etc, and analyzes the literature review with themethod of normative analysis, collects the basic data with the method of questionnaireinvestigation, analyzes the status and reasons of financing difficulty, analyzes the successfulfinancing experience of U.S. and Japanese with comparative analysis method, analyzes thefinancing structure of farmer cooperatives with balance sheet, analyzes the relationshipbetween equity financing and the property arrangement with the method of combination ofnormative analysis and empirical analysis, analyzes the factors which influence support from formal finance with dualistic Logistic regression model, analyzes informal finance with theuse of typical case studies of Xiamen Sanxiushan cooperatives and analyzes the role ofgovernment in financing with the combination of normative analysis and empirical analysis.The main conclusions of paper can be summarized as follows：(1) The fund shortage isthe main financing problem at present；（2）It can explain the financial difficulties from threeaspects--the equity financing caused by the limited investment ability and lack of membersinvestment motivation because of traditional property arrangement, debt financing difficultydue to financial support and insufficient government system support.（3）The successfulexperience of United States and Japan shows that the key of solution of the financingdifficulty especially debt financing is that they play their financial advantage seperately,therefore, China should explore the way of financing according to their characteristics andavoiding its weaknesses.(4) Unlike the U.S. and Japan that more rely on debt financing, thefinancing structure of our farmer cooperatives in general (from the total number, individualcooperatives and industry perspectives) showed more dependent on equity financing.(5)According to the property arrangement thermo and the result from Constantine Iliopoulosmodel, it concludes that property arrangement affects equity financing through memberinvestment motivation and profit allocation institution, and the practice in Fujian province hasproved that situation,therefore property change will improve equity financing. Basing on theclose relationship, it is necessary to explore arrangement on property rights for our farmercooperatives to raise equity financing capabilities, such active practices as the share system of“new generation cooperative”,big farmers’ property financing, and cooperative mutualfunds.(6)Emphasis on the role of debt financing, the formal finance and non-formal financeare two important ways of debt financing.Basing on the establishment of logistic model,thepaper analyzes the main factors which impact on the access to formal financial capital.Themodel result tells that those factors that are asset size,credit conditions,chairman situationsand relationship between cooperative and financial institutions relate getting fund from formalinstitution. The case study of Sanxiushan cooperative have proved that scientific utilization ofinformal financial (“lichajingjie”happened in internal members)is an important way ofsolving financing problem.(7)To promote more success of financing activity, governmentshould not only give it some direct finance support but also indirect support by effective lawsor policies.