Research On The Governance Structure Of Farmers Specialized Cooperatives

Farmers Specialized Cooperatives (FSCs) emerged in China as early as in1980s. Even though some progress was made in1990s,FSCs haven’t grown rapidly until the Chinese government enacted the Law of Farmers Specialized Cooperatives in2007. By far, there are about689,000cooperatives in China, serving41million farmers which represent16.4%out of the total number of farmers in China (Source from China Agriculture department website). The services FSCs cover include supply of agriculture inputs, further processing of agriculture products, marketing, information searching, technology sharing and so on. Via all of those services, FSCs play a positive role in reuniting the brands of agricultural products and adjusting their prices. In addition, FSCs bridged the gap between scattered producers and the big market and contributed a lot to the agricultural industry restructure and farmers’income and efficiency improvement. As FSCs in China are involving from the growth stage to the maturity stage, there are still a lot of problems waiting ahead, especially the over-centralized governance caused by the skewed membership basis which heavily relies on few farmers with lots of lands. Hence, the governance structure issue should be given more attention. Worse still, many of them operate in small size without standardized rules and are lack of governance systems, like board of directors, independent directors and financial management system. What the members concern are just if the FSCs can help them selling products and offer them information and technologies. None of them cares about how to operate and govern the FSCs and what kinds rights and responsibilities the members deserve. As the FSCs develop further, a sound governance structure and improved cooperation and standardized cooperation system are becoming more and more important.Based on the cooperate governance and FSCs governance theories and the statistic data of FSCs in Shaoyang city of Hunan Province, this article analyze the current situation and problems existing in China’s FSCs governance, with the hope of shedding lights on current FSCs’ governance issues and helping standardize the FSCs governance to better service their members.This article is composed of five chapters. The first chapter introduces the current situation of FSCs in China and other counties, the research objectives and purposes. In addition, it defines the coverage of FSCs analyzed in this article. The second chapter describes the basic theories, including general governance theory and FSCs governance theory. Plus, it also indicates the current governance structure of FSCs in China and their types. The third chapter is the empirical study of the governance structure of FSCs in Shaoyang. What come first are the current situation, features and functions of the FSCs governance structure in Shaoyang city. Then it summarizes the types and features of FSCs in Shaoyang city based on analysis on several examples. At last, there is the governance structure of FSCs in Shaoyang city through the analysis of the problem. The fourth chapter makes several suggestions on the FSCs governance according to the analysis of questionnaires and the results from Chapter3. The third chapter is the conclusion.