Research On The Control Mechanism Of The Relationship Between Agricultural Products Processing Company And Peasant Household

After the1990s, with the accelerated process of economic globalization and trend of diverse needs, competition among enterprises and market uncertainty has become more intense. Enterprise on his own has been unable to cope with fierce competition, more as a supply chain or network participate in the competition. Thus the relationships between buyer and supplier have begun from related party transactions to a closer partnership. It has become the key to survive and develop in the whole supply chain that how agricultural products processing company to manage suppliers, make it deep into the supply chain management and all aspects of the process of enterprise production and management and achieve value added in the process of market convergence. However, in real life, most companies do not realize this and ignore the management of supply relationship with farmers, which is one reason of poor food quality and safety. Based on the supply chain management theory, the paper attempts to study how to establish long-term stable cooperation between agricultural products processing enterprises and farmers, in order to maximize the overall efficiency of the supply chain, which is also important to the healthy development of our agricultural industrialization.The thesis takes the supply relationships between agricultural products processing enterprises and peasant household for study, analyzing its two features: the incompleteness of contracts and relational characteristics, pointing that companies should take advantage of the hybrid governance model(contractual governance and relational governance) to manage the supply relationship according to the supply chain partnership governance theory and relational contracts theory, and taking Wen’s as an example to specifically addressed the successful operation of the hybrid governance model and the good effect of relational governance.Through research, the paper argues that agricultural products processing enterprises must attach importance to the supply relationships with farmers, treating farmers as an extension of their production lines, so as to protect the strategic supply of raw materials and gain a firm foothold in the fierce market competition. There are three suggestions:firstly, enterprises should take attention to the role of farmers, establish partnerships with them and allow farmers to participate in processing as well as sales profit sharing, in order to highlight the interests of the community. Secondly, agricultural products processing enterprises need to provide farmers techniques and the corresponding production of raw materials, publicize the importance of quality and safety and cultivate farmers’awareness of quality and safety. In addition, agricultural products processing enterprises also need to establish the tracking mechanism to ensure the quality of raw materials. Thirdly, due to the important role of interpersonal in behaviors of farmers, the establishment and development of bilateral trade relations and inhibition of speculation in the transaction process, enterprises should pay full attention to the role of rural social relationships.Innovations of this paper are mainly three:(1) applying supply chain partnership theory to explain the particular relationship between company and farmers and the importance of governance, providing a new theoretical foundation for analysis of the mode "company+farmer".(2) domestic researches on governance of agricultural products’ quality and safety mainly learn theory and experience of developed countries, focusing on the construction of government policies and regulations, regulatory and internal control and testing of agricultural products processing enterprises. In the context of industrialization of agriculture in our country, this paper attempts to explore the governance mechanism of the relationship between enterprises and farmers from the perspective of management control, make full use of the characteristics of human society, from the source of agricultural products supply chain to curb farmers’opportunistic behavior, improve performance quality, and provide a new way to govern agricultural products’quality and safety.(3) management control is the complex of accounting and administration. Under the traditional research framework, controller and the one that are controlled are in the same organization, but along with organization changes and rapid development of innovation forms, such as strategic alliances, outsourcing and supply chain management, the traditional organizational management has been unable to completely solve those problems that the organizational goals are inconsistent, the distribution of benefits, monitoring and incentive problems. Although foreign countries have a series of study on inter-organizational management control, the domestic research is still relatively scarce. This paper will focus on the relationship control between agricultural product processing enterprise and peasant household, in order to supplement the related domestic research.(4)Wen’s governance mechanism is not secrets, but in reality there are not a lot of companies emulate successfully, and the present study did not give a reasonable explanation. This paper attempts to interpret the basis of Wen’s governance in concerned with its unique history and geography,as well as the self-fultillment mechanisms.Admittedly, there are still many shortcomings, mainly in the building of supply relationship, having not yet established a comprehensive analytical framework and a set of theoretical guidelines with practical guiding significance. In addition, the theoretical analysis of supply relationships between enterprise and farmers and constitute of relationships governance is not enough. All of these need further research and exploration.