Contract Validity Of The Contract Farming Research

Contract agriculture plays an important role in promoting the industrialization of agriculture and increasing the income of farmers.However,the default problem prevents its effect from being given further play.Among the factors which are affecting the rate of obeying the contracts,the major reason to be considered is the behaviour of self-benefits from peasants and enterprise.The cooperation and competition between farmer and enterprise,which had been perform the way of the game-theory processing.How we setup up cooperation-plans,improve their trading in order to balance the benefits and risks between farmers and enterprise.The pattern of the contract is worth thorough research.In the text,first I analysed the processing of Game-Theory inside the 'Enterprise + Farmers' mode basing on the Game-Theory and actual experiences of contract-agriculture development from Zunyi county.The reason for their unstable is since there's no Nash Equilibrium in the contract;it can not be done automatically.Then after considering the experience and lessons of china contract agriculture,here present two patterns which can positively improve our contract agriculture - 'Enterprise + Intermediate Organization + Peasant Household' and 'Enterprise + Peasants Household +Option' In the 'Enterprise + Intermediate Organization + Peasant Household' pattern,it can be analysed that when there is a agent organization between enterprise and peasants,obeying contract won't do any more good to enterprise(because coerce litigation from intermediate organization can be legally trusted).As peasant, opportunism behavior is subjected to the restriction.Signing the contract become the balance of Game- Theory,so the contract is more stable than before.Next in the pattern of 'Enterprise + Peasant + Option',analysis is made by using the option formula from financial innovation tools.The combination of farm produce orders and the theory of option can give farmer opportunities of high-profit income.On the other hand,enterprises receive compensation from option expenses.The high-profit opportunities from market changes assigned between two sides through option expenses. There become the mechanism of together undertaking benefit and risk,which can effectively control both parties' behavior,and guarantee the smooth implement of contract.