Study On Institutional Innovation Of Farmer Specialized Cooperative Organizations

Farmer specialized cooperative organization (FSCO) is the main organic carrier of agricultural industrialization and mercerization, and also the key point to solve the "agriculture, rural areas, and peasants" problem. The institution system of FSCO is the basic factor which determines its organic nature and developing mode. Generally speaking, the organic institution of an economic organization includes property rights institution, organizational system, and governance mechanism. Based on the research on the course of change and development, and operating modes, combining with special social environment, economic and institutional conditions, an innovational system for FSCO can be established.After a hard journey of agricultural cooperative movement and people's commune movement, the rural economic institutional reform rose and developed. The household contract responsibility system became the foundational methods of production. But lots of problems exist in the system, such as the problem of scale management in agriculture, the land management rights, the rural public products and social structure and cultural traditions. As a result, an institutional innovation has to be imperative under the circumstances.Compared the history and present situation of FSCO at both home and abroad, it's been found that FSCO's development trend is transforming from vertical integration to horizontal combination in larger scope, from labor combination to both labor and capital combination, from classic cooperatives to IOF. The same road in China showed some differences, and faced lots of obstacles, such as the productional condition, agricultural regimented, and supports from government, which show pressure to innovate and reform. The property right system of classic cooperatives is improving when the market environment is changing. And one of the most important variations is offer more reasonable rights and ways to earn profits to capital investors. At the same time, by making the investment amounts corresponding with transaction amount, an excessive strengthening of capital rights can be avoided. This trend also appears in China, which is manifested by the joint stock cooperative system. Based on the fact of FSCO's performance in China at nowadays, neither justice nor efficiency is the organizational objective alone. The relationship between labor and capital should be a new review. The joint legal entity property rights system based on the cooperation of labor should be adopted in FSCOs in China, which will encourage both laborers and investors.Establishing a new type of organization, which is agricultural specialized cooperative company, can be a fine solution to the problem of the application of external capital for FSCO. This organizational frame with mixed ownership is able to arrange the farmers'union in, by which the function of FSCO still takes effect, yet the inferiority can be screened.The governance structure embodies the property rights system. So, corresponding with the joint legal entity property right system based on labor cooperation, the legal entity governance mixed with farmer cooperative self-governance system can be very suitable. This system added farmer governance groups in the original governance structure, which are the primary organ for supervision and management by using interpersonal relationship and trust as functional mode.