Legal Restructure Of Rural Collective Economic Organizations

It has been over three decades since1982when the central government first showedconcern about three rural issues with the No.1document. From then on, three rural issues hasbecome the biggest social problem that affects social stability. The reason that causes threerural issues is the long-term implementation of industry and city priority development strategy.In order to securing the primitive accumulation of capital which industrialization andurbanization need, central government has created urban-rural dual structure on purpose toachieve the transfer of surplus from agriculture to industry and from rural to urban areas. TheFourth Plenary Session of the16th Central Committee of the CPC has proposed the importantjudgment of "two trends", indicating that China is going to transform from industry and citypriority development pattern to industry nurturing agriculture and cities supporting thecountryside pattern. This transformation creates a better external environment to solve threerural issues. However, everything is caused and transformed by the combined effects of bothexternal cause and internal cause. Though external cause is the necessary condition, internalcause is the key that determines the development direction of things. In order to solve threerural issues, it needs both favorable external environment and internal momentum. TheThird Plenary Session of the18th Central Committee of the CPC claims that we must speedup building a new type of rural management system and strengthen the collective economy. Itpoints out the direction of reform. The essence of three rural issues is that farmers’ incomelevel is too low, so the ultimate goal of reform is to raise the income of farmers and promotecommon prosperity.The establishment of household contract responsibility system once greatly promoted thedevelopment of agricultural productivity and achieved a supernormal growth of agriculturalproduction, but now the productivity promote effect has been totally released. Sincesmall-scale farmers have a lot of shortcomings such as same productions, similar trade modes,high cost of circulations, low capacities to receive technology information and weak riskresisting abilities in the market economy, they need to be united by agriculturalindustrialization organizations to carry out cooperative production. Rural collective economicorganizations are the biggest and most widely covered organizations in rural areas and havethe largest number of members. They should have been the best organizations to promote the rural cooperative economy, but the reality is that rural collective economic organizations havebecome more and more marginalized. On the one hand, because of the defects in propertyrights system, organizational form and organizational governance, rural collective economicorganizations have failed to promote the development of cooperative economy; on the otherhand, owing to the confusion between rural collective economic organizations and ruralcommunity organizations on both membership and property, part of the profits of ruralcollective economic organizations have been used for providing rural public products andmaintaining rural public services instead of becoming farmers’ property income. China has avast territory and its economic development levels of different districts are imbalanced. Ingenerally, rural economy mainly includes both cooperative economy and collective economy.For some districts that urbanization processes are slow, rural economic developments mainlydepend on agricultural production, so cooperative economies are the main economy; for otherdistricts which urbanization processes are relative quick, because of the requisitions ofcollective land, the rising of collective real estate rental prices and the rapid developments ofindustry and commerce, rural economies mainly depend on the management of collectiveassets. This paper reconstructs the property rights system, organizational form andorganizational governance of rural collective economic organizations according to therequirements of modern enterprise system. Meanwhile, this paper discusses the relationshipbetween the reconstruction of rural collective economic organizations and the governance ofrural areas and points out that the reconstructions of rural collective economic organizationsneed the government to change industry and city priority development strategy. Finally, basedon the analysis of the relationship between internal cause and external cause of ruralcollective economy development, the legislative proposals about three rural issues are putforward.In addition to the introduction, this dissertation consists of six chapters with about150,000words.Chapter one gives the definitions of what are rural collective economic organizations.Since the Founding, the concept of rural collective economic organizations has beenrepeatedly used in all kinds of laws, rules and central government documents, but theconnotation and denotation of rural collective economic organizations haven’t beenauthoritatively defined. The concept of rural collective economic organizations is oftenconfused with cooperative economic organizations. From the perspective of etymology and development history of rural collective economic organizations, collective ownership shouldbe the criterion of defining rural collective economic organizations. Although the ruralcollective economic organizations derived from the cooperation between the farmers, it haslost its cooperation characteristics. Rural collective economic organizations are different withfarmer’s professional cooperatives in organization status, nature of the properties andorganization institutions. According to the collective ownership criterion, the denotation ofrural collective economic organizations can be divided into narrow sense and broad sense.The narrow sense of rural collective economic organizations is rural community collectiveeconomic organizations. Besides that, the broad sense of rural collective economicorganizations also includes supply and marketing cooperatives, credit cooperatives andtownship collective enterprises. The study subjects of this dissertation are the narrow sense ofrural collective economic organizations and collective ownership, land link and fixedmembers are three main features of them. Because of the confusing property ownership, notseparated will and defective institutions, rural collective economic organizations don’t haveindependently personalities and cannot operate independent under market economy.Chapter two discusses the reconstruction ideas of rural collective economic organizations.Although currently rural collective economic organizations are named as “economicorganizations”, they do not operate as economic organizations. Firstly, based on the analysisof their defections, the goal of reconstruction is to reconstruct rural collective economicorganizations according to the requirements of “legal person”, so they can have independentpersonalities. Secondly, in order to perform their functions of promoting economy, ruralcollective economic organizations must be introduced with modern enterprise system andreconstructed as “business entity” in organizational form and organizational governance, sothey can meet the requirements of market economy. After reconstructions, new ruralcollective economic organizations’ main function will be the economic functions, and byensuring the economic functions to be performed, rural collective economic organizations willperform passive life support functions in the meantime. As to the service functions aboutproviding rural public products, they should not be borne by the rural collective economicorganizations. Instead, the social responsibilities of the governments should be emphasized.The economic functions include two aspects: one aspect is developing cooperative economy;another aspect is developing collective economy. In the past, cooperative economy wasconfused with collective economy. In this paper,“cooperative economy” means economic activities that join the scattered famers up to carry out agricultural industrialization byproviding technology and information services related to production, sale, processing,transportation, storage and other aspects of agriculture production and management;“collective economy” means economic activities that make profits by management ofcollective assets.Chapter three reconstructs the material basis of rural collective economic organizations.Rural collective land is the most important asset of rural collective properties, and is also thepremise and basis of the existence of rural collective economic organizations. Currently, themain problems of our country’s rural collective land system are unclear right subjects,decentralization of cultivated land, not entitling land development rights to farmers and lackof land financing functions. Since rural collective land is the material basis of rural collectiveeconomic organizations and the reconstruction of rural collective land system is consistentwith the reconstruction of rural collective economic organizations, it is necessary to firstreconstruct rural collective land system before reconstructing rural collective economicorganizations. This article discusses the reconstruction of rural collective land system fromthe aspects of confirming rural collective economic organizations to be the ownership subjectsof rural collective land, clarifying the powers of the rural collective land ownership, setting upa stable household contract responsibility system, establishing a sound rural collective landcirculation system and perfecting land benefit sharing mechanism in our country.Chapter four reconstructs the organizational form of rural collective economicorganizations. The optional paths for reconstruction of organizational form includecooperative, corporation and joint stock cooperative enterprise. This article discusses thereconstruction of organizational form from the aspects of collective ownership andorganizational innovation and argues that joint stock cooperative enterprise is the best choice.From the perspective of collective ownership, the reconstruction of rural collective economicorganizations needs to raise the income level of farmers as well as to achieve commonprosperity. It needs to be consistent with our country’s nature of socialism as well as to clearfarmers’ rights to collective properties. From the perspective of organizational innovation,since the extreme disparity between the rich and the poor in different rural areas, some areasare suitable for developing cooperative economy while other areas are suitable for developingcollective economy, reconstructing rural collective economic organizations through jointstock cooperative system could fully respect the farmer’s self choice. It not only meets the needs of the reality, but also maintains the seriousness of the law. According to the practicalexperience of the joint stock cooperative system in the past, in order to ensure the stability ofthe joint stock cooperative enterprises, it must make certain restrictions on the joint stocksystem. Its function is to confirm rights instead of attract capitals. For the sake of makingrural collective economic organizations carry out the production and business operationeffectively, their internal governance must be reconstructed in the aspects of operationalmechanism, voting mechanism and allocation mechanism.Chapter five reconstructs the social environment of rural collective economicorganizations. In order to make the proposals of reconstruction of the rural collectiveeconomic organizations rise from theories to legislative practices, it has to coordinate therelationship effectively between the reconstruction of rural collective economic organizationsand rural governance. Socialization of farmers, reform of taxes and fees and unfinishedprimitive accumulation of capital are the main backgrounds of current rural governance.Under these backgrounds, the major problems of our country’s current rural governance arelack of rural public products and aggravation of rural land conflicts, so the reconstruction ofrural collective economic organizations do need to deal with these problems. Forreconstructing rural collective economic organizations’ membership relations, it shoulddistinguish rural collective economic organizations’ membership from rural collectivecommunities’ membership. And the distinguish time should take the time of property rightssystem reform as the node. For reconstructing rural collective economic organizations’property relations, the rural collective economic organizations should not set collective share.The government finances should be mainly responsible for providing rural public productsand maintaining rural public services. And before the full implementation of economic andsocial integration between urban and rural areas, the countryside should further improve thesystem of "one project one discussion for raising fund and labor".Chapter six summarizes the contents of the first five chapters, and puts forward relatedlegislative suggestions. Firstly, for our country’s rural collective land system, the law shouldclear rural collective land ownership, stabilize land contractual management right andestablish farmer’s right of land development as soon as possible. Secondly, for the ruralcollective economic organization itself, the legislature should enact the "rural collectiveeconomic organization law" as fast as they can. Rural collective economic organizationsshould not set collective shares and external shares and should restrict the transfer and mortgage of shares to a certain extent. Thirdly, for the reconstruction of external environmentof rural collective economic organizations, on the one hand, the government should increasethe financial support for agriculture and take the responsibilities of providing village-levelpublic products. On the other hand, the government should give rural collective economicorganizations tax privileges to support the development of the rural collective economy.Finally, the reconstruction of the rural collective economic organizations make farmers reallybecome the owner of rural collective economic organizations, so the legislation should notonly be concerned with the rationality of the organizational system and the governmentsupport, but also pay more attention to the cultivation of farmers’ autonomy consciousnessand autonomous abilities.