The Research Of Municipal Land Shareholding Cooperative’s Internal Governance

Under the new situation and the condition of stabilizing the household contract responsibility system of rural collective land as well as protecting farmers’ land rights and interests, how to make full use of rural land resources, especially the arable land resources, promote the development of modern agriculture, improve agricultural efficiency, increase farmers’ income and ensure national food security has become a major issue to be taken seriously and resolved for the agricultural development. Chengdu municipal has conducted a bold experiment on the internal governance of land shareholding cooperative, which has gained some breakthroughs and initial results. Based on the investigation and analysis of the operation of Chengdu Municipal Land Shareholding Cooperatives(CMLSC), this thesis will explore the internal governance of the new agricultural organization.Based on the above background and the available research findings, this thesis will employ the system innovation theory, cooperative economic theory, entrusted agent theory, and enterprise governance theory, etc. coupled with research methods of induction and deduction, statistical analysis, mathematical model and so on to conduct a more reasonable and through research on the internal governance mechanism of land shareholding cooperatives in Chengdu Municipal in order to explore the internal governance mechanism of this new type of agricultural economic organization.The scientific issues to be addressed are the contents of and the means for internal governance of land shareholding cooperatives, the relationship between subject and object as well as its corresponding management mechanism and effects, and exploring the law of its internal management to provide reference for perfecting the internal governance of land shareholding cooperative.I. The Main Research ContentsFor the complete of tasks and achieving the research goal, the content of this paper will focus on the following five aspects.Firstly, the emergence and development of CMLSC will be addressed. This part will focus onthe internal needs and external conditions for the emergence and development of land shareholding cooperative, summarize its development and operation situation, and its contribution to the innovation of rural land system, to the innovation of agricultural production organization, to the innovation of agricultural production and operation modes, to the cultivation of new agricultural production subjects, to the promotion of agricultural development and to protecting farmers rights and interests, etc, so as to provide backgrounds for the research of internal governance of land shareholding cooperatives.Secondly, the balancing system of subject rights and interests in CMLSC will be studied. This part will mainly study the subjects in land shareholding cooperative, their rights and interests, and the balancing system of subject rights. The right balancing mechanism between peasant households and other subjects, the mechanism between cooperatives and other subjects, and the mechanism of right balancing system between professional agents and other subjects will also be studied in this part.Thirdly, the corporate governance for agricultural development in CMLSC will be studied. This part will focus on the system of achieving the low cost accumulation of agricultural land, the mechanism of making full use of agricultural land, and the ways of agricultural land for agriculture purpose and the mechanism to promote the agricultural scale, specialization, and the modern transformation of the production mode. Moreover, in this part, the author will discuss the mechanism of land shareholding cooperatives in promoting agricultural development and modernization.Fourthly, the production and operation mode of CMLSC will be addressed in this part. This part mainly studies the entrustment of land use right in land shareholding cooperatives, the supervision mechanism of cooperatives on the production and management of professional agents, the operation system of agricultural production and management established by professional agents, and the incentive and restraint mechanism for relevant subjects in the process of full authority management will be included in this part, all of which will aim to explore the operation and controlling mechanism of the entrusted production and management modes.Fifthly, the profit sharing in CMLSC will be studied. This part devotes to the sources of income and the decision of income level, the confirmation of benefit-sharing subjects and the set of share guidelines, the supervision and coordination of relevant benefit-sharing subjects, as well as the benefit-sharing incentives for related subjects so as to discuss the ways and institutional innovation in terms of realizing multi-subject win goal in the land shareholding cooperative system.II.The Main ConclusionsThe present research has come to five conclusive points through field survey and analytic elaboration which are as follows:1. Land shareholding cooperative is an autonomous innovation of land system(the internal governance mechanisms)on the part of farmers. CMLSC is an innovative cooperative economic organization selected by farmers in the new situation in order to protect land propriety, developagricultural production as well as increase agricultural incoming. It is autonomously created,managed and promoted by farmers, the establishment and operation of which center around farmers who act as independent legal persons. Therefore, the new organization wins supports from and serves an extensive public in rural areas. Land shareholding cooperative is established under the condition that farmers own the right of management to the contracted land which acts as their shares as well as properties. This way, rural community ownership and the rights of contraction to land operation mechanism on the part of farmers have never been challenged. The rural household contract responsibility system has been improved and perfected.2. Systematical interest balancing perfection of land shareholding cooperative can provide guarantee for system innovation. Land shareholding cooperative is a product of system innovation as well as a platform for organization of the system. In this organization each member has his interests and demands which might be in opposition to each other in one way and in accord in other ways. As a platform for innovation, the aim of land shareholding cooperative is to bring land resources into full play, promote agricultural development and modernization, as well as to guarantee the lawful rights of farmers. In order to coordinate different interests and demands of members in the organization, the best way is to establish a two-way interest balancing system among farmers, among farmers, the organization and agents, as well as between organization and agents.3. Land shareholding cooperative’s mechanism has perfected land usage and changed agricultural development for the better. Land shareholding cooperative has effected concentration of agricultural land from the hands of farmers through voluntary shareholding. It has realized the management of large scale agricultural land by working as an agency and further allocates the management right of agricultural land to agents by promotion of land bonus. Agents are constrained by the agent conditions and have to work for land bonus and individual profits through taking good advantage of land allocated to them in order to increase production. In the meanwhile, they have to make good use of advanced technology in order to increase output and product quality. They also will employ modern management to decrease costs. Hence, agricultural desolation has been avoided and the situation of farmers abandoning land has been changed.4. The innovative double agency system of land shareholding cooperative’s mechanism has improved ways of agricultural production. Land shareholding cooperative has through this way accomplished transformations from semi-self-sufficient agricultural production to commercialization of it, from small-scale decentralization to large scale production and professionalization, from adoption of traditional technology to employment of modern technology and facilities. These transformations have not only helped to blaze new trails for agricultural production mode and the development of new subjects, promoted the transformation from traditional agricultural productionand management mode to modernization, in the meanwhile, they have promoted allocation and usage of agricultural resources(especially land resources).5. The focus of land shareholding cooperative’s internal governance mechanisms is on protection of land rights for farmers. The immediate goal for farmers to join in land shareholding cooperative is to realize land interests and protection which is the only ground for land shareholding cooperative to be established, operated, and reformed. The land rights of farmers include management right and profit right. When their rights of management are transformed into shares by joining in land shareholding cooperative, their rights are embodied in the rights of land usage, land protection management and supervision, sharing of land profits, and others. The operation of double agency system within land shareholding cooperative, reformations of agricultural production,development of new agents for production, as well as transformation of agricultural production and management all have to be based on the condition that farmers in the cooperatives will share land profits and interests fully and reasonably. Without that, any reformation and innovation would be impossible. Therefore, guaranteeing farmers’ profits and interests should be put in the first place in the internal governance mechanisms.III. Innovation of this researchThe thesis may come to three points in terms of innovation through the study of CMLSC.1. The thesis puts forward four important contents and three main methods for the internal governance of land shareholding cooperatives.The study finds that the improvement of interest and benefit relationship among subjects, the improvement of agricultural development and production organization, and the improvement of benefit sharing are four key areas in the internal governance of land shareholding cooperatives. The regulation management, democratic consultation and benefit attraction are the main methods for internal management of land shareholding cooperatives. Overcoming the problems in the four key areas and those important contents means eliminating the obstacles to normal operation and healthy development of land shareholding cooperatives. Those three management methods will make the internal management of land shareholding cooperatives more effective.2. The study also proves that the double agency system for the land use right is a successful mode in the production and operation management of land shareholding cooperative.The study proves that the double agency, entrustment of farmers’ land use right to agents of land shareholding cooperatives and the entrustment of land use right from land shareholding cooperatives to professional agents, realizes the separation of land contract right and the land use right of farmers and realizes the transformation from land resources to land real estate properties, the transformation from dispersed inefficient use of farming land to high centralized efficient use, and thetransformation from random use of farming land to the regulated use. The participation of the third party, the professional broker, improves the productivity of land and labors, improves the agricultural efficiency and marketability. Therefore, the double agency is a successful mode for the production and management of land shareholding cooperatives.3. The research reveals the inner mechanism for agricultural development and management in land shareholding cooperatives.The study shows that by means of voluntary membership, the land stock cooperative makes it possible that the dispersed land can be gathered and thus guarantees a scaled and specialized production. This kind of double agent management will trigger the transformation of production organization and operation, as well as the organization and modernization the agriculture. With responsibility restrictions and benefit attraction on the brokers, the advanced technology and production method will be promoted, and the land yields and labor productivity will be improved.All these innovations will effectively promote the development and transformation of agriculture.