Study On Legal Issues Of Farmer Cooperatives In Our Country

The territoriality, seasonality and instability of agriculture decides its flexibility, so agricultural workers need to have more independence than industrial ones in production. Our country’s history and production practice have proved that family is the most suitable for agricultural production as basic operating units. In our country rural basic management systems include the household contract management and the double management system, however this management structure is unable to play its due role, because the legal status of collective economic organizations is unclear, the property right is fuzzy, there is lack of governance structure, and the administrative color is strong. After entering the market economy era market units increasingly appear to group identity, as a result family is hard to resist the big market risk in production and management. This requires that farmers unite to form their mutual aid organization in order to highlight the strength of groups, farmer cooperatives come into being for meeting this objective necessity. Farmer cooperatives play an important role in improving the degree of farmers’organization, promoting agricultural modernization and enhancing the market competitiveness of agricultural products, etc. As the first portion of our country’s legislation in the field of cooperatives, the Law of PRC on Specialized Farmers Cooperatives has far-reaching implications for the development of our country’s modern agricultural cooperatives because it provides a more comprehensive legal systems in this field. After having experienced a tortuous development path, in our country farmer cooperatives not only will face how to resolve the contradiction between servicing for members and operating profits, which western countries have faced in the period of their farmer cooperatives development; but also will be affected by the particular political and economic environment. Professional farmer cooperatives are mostly leaded by big agricultural units, leading enterprises, collective economic organizations and grass-roots supply and marketing cooperatives, and above-mentioned organizations often hold a majority stake and have the absolute rights to speak in cooperatives. This will lead to deletion of internal governance system and conflicts of interests between core members and ordinary members. This doctrine aims at solving above-mentioned problems from the angle of law, and then improving the legal system of farmer cooperatives. The research idea of this doctrine is based on our country’s conditions and learning successful experiences of other countries and regions, and studies legal problems concerning farmer cooperatives, including the legal nature of farmer cooperatives, members and membership rights, property structure, governance structure, etc.The main part of this doctrine is divided into six chapters.Chapter one is to analyze the system value of farmer cooperatives. Firstly, the research on origins of cooperatives system of many countries reveals the changes of cooperatives’ value. In developed countries the movement of cooperatives is the social movement spontaneously formed by the social weak, and cooperatives mainly host economical function. However, in our country cooperatives system once became mandatory institutional arrangement as the macro tool that was used to improving economic outlook. Secondly, research on the heterogeneity between cooperatives and other economic organizations shows that characteristics of cooperatives are not matched by other economic organizations. So, farmer cooperatives have their own values. Finally, the institutional value of our county’s cooperatives is deeply affected by political and economic environment. So, on the value level cooperatives should be oriented as an economical means by which farmers help each other. At the present stage, the development of farmer cooperatives should adhere to fair priority, at the same time take efficiency in to account, so as to achieve the interaction between fairness and efficiency. So it is necessary to balance interests between core members and ordinary members through the fair mechanism.Chapter two is to research the legal nature of farmer cooperatives. Firstly, this doctrine demonstrates the establishment of cooperatives’ legal status through researching properties, obligations and other structural elements of our country’s farmer cooperatives on the basis of investigating the legal status of extraterritorial farmer cooperatives. Secondly, being the independent legal property of cooperative as the research approach and two kinds of legal classification as the research clue, this doctrine profoundly discriminates the property dispute on farmer cooperatives in the academic field. Thus, the legal nature of farmer cooperatives gets re-understanding. Under the current classification system determined by Civil Law in which the legal person is divided into enterprise legal person and non-enterprise legal person, farmer cooperatives should be clearly generalized the corporate property. Under the theoretical classification system of the for-profit corporate and non-profit corporate the investigation on the non-profit property of farmer cooperatives is inseparable from the understanding on the re-classification of non-profit corporate, and the mutual-benefit legal person in the common law fits with farmer cooperatives.Chapter three is to study members and membership rights of farmer cooperatives. Balance on opening or confine the membership of farmer cooperatives embodies the conflict between fairness and efficiency on the legal value level, and reflects the combined effects of private autonomy and national mandatory on the private law level. The relative provisions in the Law of PRC on Specialized Farmers Cooperatives place restrictions on the behavior ability and farmer identity of the natural person members, this is not reasonable. In the development process of our country’s farmer cooperatives we ought to make the following chooses, eligible membership of natural person lack of capacity for civil conduct, identity transformation of natural person, opening business association and confine rights of community organization members. Membership rights of farmer cooperatives refer to independent civil rights owned by members. Based on characteristics of specialized farmers cooperatives, rights of their members show off different contents with other cooperatives in the aspects of trading rights, voting rights, distribution rights of surplus, rights of withdrawing, etc. There are two obstacles in the exercise of these rights, the desire of ordinary members operating these rights subjectively is not strong, and the exercise of democratic control owned by cooperatives member is objectively blocked. So, the realization of membership rights needs programmatic relief. It is necessary to endow members the right to appeal when there are defects in general assembly resolutions, and give them the right to appeal against the harm behavior of manager or director. The above mentioned means can better protect rights of farmer cooperatives members. Chapter four is to study the property structure of farmer cooperatives. Firstly, the capital system of farmer cooperatives shows following characteristics:capital agreement, capital variability, etc. The outer environment and inner characteristics together determine that no provision of minimum registered capital is rational at current stage. This is determined by the status quo of our country’s agriculture, in practice cash owned by farmers is not sufficient, at the same time intellectual property is more scare, so non-monetary investment becomes necessary. In order to solve this problem, the law should permit farmers use their land contract and management rights to stake farmer cooperatives. Secondly, famer cooperatives enjoy rights of possession, use and disposal of the property. However, we cannot define the property rights enjoyed by farmer cooperatives as ownership, and they are impossible to be defined as other property rights because of the lack of legal basis. At current stage the property ownership in the law is not clear, this situation is difficult to adapt to the complex objective facts of cooperatives’ property. The diversification and liberalization of cooperatives’property are unable to be covered by the concept of ownership, so the concept of corporate property is well suited to the qualitative property of farmer cooperatives. Lastly, in our country farmer cooperatives mainly allocate surplus according to shares of its members, but the law allocates the surplus on the basis of the amount of transactions. This situation reflects the interests imbalance among members in farmer cooperatives. So, we should adhere to allocating the surplus on the basis of the amount of transactions as the basic principle, at the same time the allocation according to shares should be limited within some scope. But it is realistic choice at the present stage.Chapter five is to study the governance structure of farmer cooperatives. It originates from theories of corporate governance structure, and the theory of separation of ownership and control rights and the agent theory are an important part of the basic theory of cooperatives’ governance structure. On this basis, we can absorb the stakeholder theory to balance interests of all parties, including members, managers, shareholders and other stakeholders. In essence the governance of farmer cooperatives is the mechanism for benefit balance between owners and managers, it aim at balancing rights and obligations. Our countries’ farmer cooperatives are lack of this balancing mechanism, as a result their governance structure is not standardized, and their operating mechanism is not perfect. It seriously troubles the development of farmer cooperatives. The governance organization of farmer cooperatives can be optimized through completing the general assembly, council and board of supervision, and their governance mechanism can be optimized through completing democratic decision-making, excitation and supervision.Chapter six is on suggestions of improving the Law of PRC on Specialized Farmers Cooperatives. We find that there are still many shortcomings in the Law of PRC on Specialized Farmers Cooperatives through above studies, and this is not conducive to construction and operation of famer cooperatives. So, this doctrine puts forward concrete proposals to improve it. These proposals include suggesting on improving regulations on the acquisition, loss, exercise and relief of membership rights; suggestion on clarifying the legal nature of property of farmer cooperatives and perfect rules for capital contribution; suggestion on improving relevant provisions of the general assembly system, the council system and the supervisor system, etc.