Behavioral Study On Farmers’ Participation In Cooperative Mutual Fund

In the process of reforming the existing financial system, the financial reforms in rural areas has always been an essential part. However, formal financial institutions like Agricultural Bank of China (ABC) and Rural Credit Cooperatives (RCCs), etc. are increasingly alienated from the rural areas in general due to their commercial nature to a certain extent. What’s more, some non-formal financial institutions encountered multiple obstructions during its development due to deficiencies in the relevant legal norms, which then affects the rural finance development directly and results in insufficient financial supply. Although the economy in rural areas has been improved continuously, the development of the financial system is still not consummate enough. The problems concerning agriculture, countryside and farmers (the three rural issues) has not been resolved properly in a timely manner. To improve the situation and meet their financial needs, the majority of farmers has created the Farm Mutual Funds-a new-type cooperative financial institution in their exploration of agricultural production.Cooperative Mutual Fund has the ability to meet farmers’ financing needs effectively and solve the supply shortage of financial service in rural areas. The main body of the organization is farmers, whose active participation contributes greatly to its rapid development. Therefore, this paper analyzed the situation of farmers participating in cooperative mutual fund and the factors affecting farmers’ behavior from the perspective of farmers. The farmers are encouraged to take part in the fund by a serial of incentives, resulting in both high-speed development of local economy and resolving of their own financing problems.Accordingly, the paper conducted an on-site investigation at Yancheng, which has started cooperative mutual fund at a very early stage. Then I selected farmers of three districts to learn the current development of cooperative mutual fund there, and involved in statistics and analysis based on the common features. By the theory analysis of the impacts and factors and also the in-depth study of creating the econometric models through empirical methods, I addressed the critical factors and draw the final conclusion accordingly.The findings and drawing conclusions is as follows:(1) The cooperative mutual fund played an active role by effective supplying for rural finance and solves farmers’ financing problems to a certain extent. On one hand, it provides the farmers with loans in a prompt and convenient way. On the other hand, it benefits greatly for increasing farmers’ income as well as to improve economic efficiency. (2) It proves that four main factors of awareness of farmers, being a village cadre or not, the demand level for production funding and government’s policy has a significant impact on farmer’s participating behavior by regression analysis. (3) In order to draw more attention and participation of farmers to cooperative mutual fund, the relevant governmental departments should make better efforts to improve the publicity and awareness of the organization; then carry out a number of training in agricultural technologies to enhance the production and management capacity of farmers; finally, to strengthen the risk management and farmers confidence in the cooperative mutual fund.