Research On Agricultural Product Circulation Model Compare And Choice

The agricultural issues with the core of agriculture, rural areas and farmers have long been one of the most important one in China. China is a country with a vast agricultural base. Agriculture is the foundation of our national economy. The rural area is a weak area in China’s economic development. The number of farmers accounts for70%of the total population of the country. Therefore, the "three rural" issue has always been the fundamental issue for the development of the party and the nation, especially as "Document No.1"s published by the Party Central Committee from2004to2014, the11consecutive years, are focused on the "three rural" issues. And theories and practices have shown that the circulation of agricultural products is the key to solve the "three rural "issues and a matter vital to the nation’s economy and the people’s livelihood. The efficient mode of the circulation of agricultural products contributes the effective way to solve the difficulties on selling and buying agricultural products, helps to achieve the balance of supply and demand of agricultural products, and then promotes the increases of farmers’incomes and the stability of the society.Since China’s reform and opening up, revolutionary changes have been taken place in the circulation system of agricultural products from the state monopoly for purchase and marketing in the time of the planned economy to the presently initial establishment of the diversified, multi-channel, multi-level, multi-format market-driven system. Farmers are provided with multiple optional ways to select diversified modes of the circulation of agricultural products which can serve as supplements with their respective advantages and disadvantages. The research data of this paper shows that the current circulation system of agricultural products in China still basically runs in the traditional mode driven by middleman and wholesale market, and in this mode, farmers in the weak position are the market price taker with the higher risk of fluctuations in market prices, simultaneously the circulation of agricultural products have relatively high costs and low efficiency for operation. Experiences have shown that the circulation mode of agricultural products in developed countries, led by farmer cooperatives, will usually improve the income of farmers, and selling agricultural products through the cooperative organizations will effectively reduce transaction costs and maintain a high level of circulation efficiency. This article considered from the perspective of farmers with the circulation modes of agricultural products as the theme for in-depth study, aiming at exploring the development mechanism suitable for China’s agricultural products circulation mode, empirically analyzes the factors by which households choose different circulation modes of the agricultural products, and focuses on the mode of farmer cooperatives involved, to provide a theoretical foundation for setting up specialized farmer cooperatives and for promoting the circulation of agricultural products.The study is divided into seven parts, corresponding to the following:Chapter1is the introduction part of this paper. It is an overview and also the premise and basis of this study. This chapter includes the background of this study, theoretical and practical significance, research paths, methods and structure of the paper, the main contents of the overview, key concepts and definitions in relevant areas and possible innovations and so on.Chapter2is a literature review and the theoretical basis. Literature review includes research reviews of relevant theories on circulation of agricultural products and on farmer cooperatives at home and abroad. The section of the theoretical basis discusses the transaction cost theory, marketing channel theory and cooperative economic theories which acts as analytic tools for the present study.Chapter3argues the existing major circulation modes of agricultural products in our country. With the existing varied circulation modes currently, according to the purpose of this study, this article from the farmer’s perspective focuses on comparative analysis of five modes of the " farmer and market"," farmer and broker "," farmer and wholesaler","farmer and leading enterprises" and " Farmer-Supermarket Direct-Purchase". Each circulation mode of agricultural products has its own advantages and disadvantages so they can serve as supplements with each other and provide farmers with a variety of alternative ways.Chapter4is the theoretical study of circulation modes of agricultural products. This chapter based on the transaction cost theory, makes a point that a circulation mode of agricultural products should be divided into3types of the market mode, contractual mode and entrepreneurial (integrated) mode. A market circulation mode of agricultural products means to coordinate trade relations between subjects with the price mechanism, thus to contribute to the circulation of agricultural products from the field of production to consumption. An entrepreneurial(integrated) mode of agricultural products means to integrate and internalize the circulation process of agricultural products, and to coordinate the process of circulation of agricultural products through the authority of the command mechanism. The contractual circulation mode of agricultural products is a mode in an intermediate state in which trade relations between subjects are neither the kind of the pure market exchange relationship nor the kind of the corporate bureaucracy relationship but a cooperative trading relationship connected through contracts and relationships. This chapter emphases on the analysis of the characters and applying conditions of the market mode, contractual mode and entrepreneurial(integrated) mode of agricultural products and comparative analyses of these3modes.Chapter5experimentally examines factors by which farmers choose different circulation mode of agricultural products. This part makes a research on factors by which farmers choose different circulation mode of agricultural products from the respect of personal characteristics, family characteristics of farmers and the property of agricultural products, and combined with the survey data for the farmers, through the application of Multinomial Logistic Regression Model and Binary Logistic regression analysis, finds that varieties of farmers’educational background, identity, family size, type of agricultural products and the length of trading relationship between farmers and purchasers of agricultural products have a significant influence on the choices for farmers choosing the circulation mode of agricultural products. Farmers engaged in aquaculture and highly educated are more likely to choose "farmers and enterprise" circulation mode of agricultural products than the "farmers and wholesaler" one. Farmers with special identity of a village cadre prefer "farmer and enterprise" and "farmer and cooperative" mode. Farmers engaged in aquaculture, farmers with a big family size, and farmers who maintain a long trading relationship with middlemen prefer the contractual mode to the market-driven one.Chapter6focuses on analyzing the mode of farmer cooperatives involved. Firstly, this chapter comparatively analyzes the experiences of developed countries represented by Japan, U.S.A. and Germany, and the effects of farmer cooperatives in the circulation of agricultural products. Secondly, we analyze the important role of the farmer cooperatives in promoting the circulation of agricultural products, and the economic consequences under different circulation modes with a mathematical model. It is concluded from the analysis of the model that "farmer and cooperatives and middlemen" mode is a more efficient one compared with the "farmer and agricultural middlemen" mode. Finally, this part analyzes: the mode of "farmer and cooperative and leading enterprise","farmer and cooperative and supermarket","farmer and cooperative and shop","farmer and cooperative and e-commerce" comparatively with the specific cases specialized farmer cooperatives involved circulation mode of agricultural products.Chapter7is the section of conclusions and policy recommendations. This chapter firstly summarizes the conclusions of this study and puts forward the basic policy recommendations on supporting the development of specialized farmer cooperatives and promoting the circulation of agricultural products. More, it also points out the limitation of the study and makes prospect for the future.