A Study On New Farmer Specialized Cooperatives’ Governace Structure

A farmers’ professional cooperative is a mutual-aid economic organization, which is voluntarily formed by production and business operators of similar agricultural products or by providers or users of similar agricultural production and business operation services on the basis of rural household contractual management and which is subject to democratic management.From the1980s on,with the development during the last20years,a new pattern of farmers’ professional cooperative has begun to take shape and has played a larger role in promoting the development of rural economy. Especi ally,to some extent,it has solved the joint problems between the production of dispersive farmers and the unified market.Since the implementation of Law of the People’s Republic of China on Farmers’ Professional Cooperatives in July,2007,a series of problems concerning legal status,organizational attributes,profit distribution and internal governance which restrict the development of farmers’ professional cooperatives have been clarified to some degrees.However,with the "systemic heritage" of economic systerri,the "diversity" of involved parties,the "exogenous type" of growth path and the function political elements in the forming process of farmers’ professional cooperatives,some issues have emerged ceaselessly in farmers’ professional cooperatives’ operation process,such as the weak cohesion inside the farmers’ professional cooperatives,the improvement of the areas of cooperation between the service of farmers’ professional cooperatives and farmers,the further innovation of governance structure inside farmers’ professional cooperatives and the further development of farmers’ professional cooperatives which is subject to a fund.Therefore,facing the vigorous development of the practice of farmers’ professional cooperatives,the systematical theoritical interpretation focusing on property right system and governance structure are necessary.Mainly based on the Marxism idears about cooperatives,the methods in this paper are the combination of the method of jurisprudence and economics,normative analysis and empirical demonstration,comparative institutional analysis and case analysis.A system analysis framework about management mode of cooperatives is being provided which is started from the enterprise theory relying on corporate governance,adopts the management mode of cooperatives as the main line and aims at the perfection of the specific governance systems.In order to demonstrate theoretically the ideal management mode of cooperatives,drawing lessons from corporate stakeholders governance theory,this paper concludes that other words,the ideal goal of management of cooperatives is common governance participated by all members.But in practice,the common mode will result in in sufficient excitation of members and inadequate investment. In that case,the common governance infixed by constrain ted capital control is preferable in the present stage of our country.Meanwhile, considering the short implementation of Law of the People’s Republic of China on Farmers’ Professional Cooperatives,the practice of governance structure being perfect and developing the rough regulation of governance system because of the principle of "be broad rather than detailed"in legislation, this paper will transit from the theory of management mode to the specific pratices by using the related regulations of legal corporate governance for reference.This paper consists of6parts.The first part is an introduction which introduces the background,the goal and the significance of the research,makes clear of the issues to settle,the framework and methods and firstly concludes the potential innovation.The second chapter is literature review which summarizes the related legal and economic literature from the perspective of governance structure and make comments.First of all,all members of enterprises theory are reviewed which mainly include the cooperation ideas in Marxism,the contract theory of the firm,the theory of property rights,labor management theory and corporate governance theory.Second,the chapter reviews the research status of cooperative management structure by domestic scholars.Third,comments are initially made about the literature.On the positive side,firstly,the existing literature adapt many kinds of research methods.Research angles tend to make diversification,concluding the research of external environment conditions and the analysis of internal structure of cooperatives which are good to broaden the research.Secondly,the existing literature theorically focus on the research of the nature,function and the evolution types of cooperatives,which contains enlightening significance in recognizing systematical characteristics of internal cooperatives.Thirdly.learing positively from the company governance structure,changing the type of governance of cooperatives and amending the laws ceaselessly,which are good for the amendment of Law of the People’s Republic of China on Farmers’Professional Cooperatives.The paper also holds a view that there exists much insufficience such as the unindependent objects,the lack of systemization in contents,empiricalation in methods and unspecific perspectives.The third chapter is the part of model analysis which demonstrates the ideal management structure of cooperatives is common governance mode.First,this article analyses the three reasons of adapting common management mode:ownership sharing,democratic control and management and the bearing social responsibility,which lead to the application of common governance mode which are necessary to all members’enthusiasm and improving the operation efficiency.Second,that the ideal structure should be common governance model is demonstrated by adapting the enterprise cooperative game theory model and the model is the equilibrium solution of cooperative management which is Psreto effect.The demonstration has drew some lessons from the research findings of enterprises cooperatives game theory made by Masahiko Aoki.Basing on the demonstration of the above-mentioned model,firstly,chapter4gets back to the management practice in the worldwide to explain why the common governance mode is practicable theorically but results in weak encouragement and inadequate investment in practice,leading the model being weak in the present time.Therefore,assumptions should be released and the control of capital should be applied.Secondly,learning from the idears and principles of corporate governance,basing the goal of adapting to model of common governance and combining the governance practice of farmers’ professional cooperative,it is provided that at the present stage the available governance mode is the common governance mode restricted by the constraints of capital control.which emphasizes the value sense of democracy,strengthens operators’ fiduciary duty and appropriately adopts the capital control and surplus distribution.Last but not least,to put the dieas and principles into effect, the specific systematical arrangement,such as member structure,system of the right to vote.the structure of organ of legal person and fiducirary duty of operators,are provided by getting experiences of the research of cooperate governance.Chapter5is a comparative case analysis which make3selections of the governance of enterprises in Mondragon(a typital mode of common governance),the management of broccoli professional cooperativesin L village of S town located near the coast of ZheJiang province(the capital-control governance), which is developed area,the administrative of vegetable cultivation professional cooperatives in wrangler mountain of ShuangLiu county in ChengDu city(the common governance mode restricted by the constraints of capital control).Through the analysis of the mentioned part,it is concluded that the introduction of capital control,which is inevitable and possible,is a systematical innovation of market economy mechanism when the economic parties are guided by external benefis.However,the ownership arrangement in cooperatives appear obvious layered,clustering and heterogeneous effect between members and go far away from the nature of cooperatives,accompanying the weakening of the function of cooperatives.To avoid the negative sides,it is necessary to restrict the control of capital.There are two section in chapter6.The first section is about the conclusion and the enlightenment in making policies influenced by the conclusion.The second section is about the direction of future research.