Research On The Business Model Of Farmers' Cooperatives In China

The famers' cooperatives are developing very well in China.However,most of them operate badly.There are many false cooperatives.In order to provide legal basis for the cooperatives,the<Law of the People's Republic of China on Specialized Farmers Cooperatives>was issued in 2007,but have resulted in much criticize.In 2013,document NO.1 of the central government put forward to revise it.It seems that although we have organized the famers together through cooretatives,we still don't make sure how to organize the famers.Focusing on the inner system of the farmers'cooperatives,Scholars have done many studies on governance of farmers,cooperatives.The business model is a system in which the market entities could deal with the stakeholders for creating and acquiring value.It would be very helpful for us to answer these two questions by using the theory of business model to analyze farmers' cooperatives and broadening the research scope to the trade between farmers'cooperatives and other entites.At present,people have not reached a consensus on the business model theories,which are not perfect as the analytical tools.Based on the clear definition about the business model's connotation and extension,we established the structural model about farmers' cooperatives,which is composed of transaction objects,transaction contents,transaction modes and transaction structures.According to the structural model,we further identified the elements of the farmers' cooperatives business model,which inclde the transaction object,transaction content,transaction mode and transaction structure.To classify the business model is useful for deepening the understanding about the farmers' cooperatives.We have identified three basic types,such as economies of scale,economies of scope and vertical integration.We believe that a farmers' cooperative may contain these three basic types simultaneously.By selecting the contents and methods of the trades between the farmers' cooperatives and its members as judging standards,we could identify the type of farmer cooperative business model in accordance with the steps such as identifying transaction items,describing transaction modes,estimating value creation,estimating acquisition modes and identifying the types of the business models may be contained.How to choose the proper business model for the farmers' cooperatives is the question of great concern.In fact,the key point is not about which business model is better but about the matching degree between the characteristics and requirements of farmers 'cooperatives.We believe the business model of farmers' cooperatives which have strong profitability,coherence with the target type,compatibilityabout the modes of governance and adaptability to internal and external conditions is the bertter model.In the choice of business model,the farmers,cooperatives should consider the various factors,such as the natural resources,technology resources and social economic resources,industrial environment,technical conditions,production factors,the government and so on,and design a reasonable transaction system according to the scientific process.Through the analysis of the farmers' cooperatives cases published on the important Chinese newspapers,we found that the Chinese farmers' cooperatives mostly contain the business model of economies of scale,but rarely contain the the business model of economies of scope and vertical integration about deep processing of agricultural products.Most of the investigated farmers' cooperatives have strong profitability.The transaction system established by the farmers' cooperatives,which implement the business model of economies of scale,fully reflects the requirements of the economies of scale business model.Without obvious conflicts with governance mode,the farmers' cooperatives keep the coherence between the control power and contingent claims of the residual value.There are more agricultural land share cooperatives and less cooperatives,which work on deep processing of oagriculture products.The phenomenon above is adapt to the inadequate supply of the rural funds and weak financing ability of he cooperatives in China.Base on the judgment about the mission of Chinese farmers' cooperatives and the development environment they faced,we have given the basic scheme to improve the business model of Chinese farmers' cooperatives:Constructing the system of farmer cooperatives with complementary advantages and comprehensive coverage to provide omnibearing services for the development of 'agriculture,rural areas and farmers' by playing the role of villager 'autonomous organization under the leadership of the party,guiding farmers to develop credit cooperation,activating rural production factors and simultaneously developing comprehensive cooperatives and professional cooperatives.The implementation of this scheme requires government to supply the coordinated measures about supporting,supervising,guiding and system construction.According to the measures above and reasonable steps,the government could establish and strengthen the supervision system of cooperatives orderly,confirm the legality of the comprehensive cooperative,encourage the farmers' cooperatives to carry out credit co-operation and categorically lead the cooperatives up to develop consistently and healthily.There still exsist lots of issues to explore since the scale about business model of the farmers' cooperatives is massive.I hope the scholars work on this area could deepen relevant research in the future.I suggest the emphases for research could focus on perfecting business model theory,detailing the elements of farmers' cooperatives business model,summarizing the cases about specific business model of farmers'cooperatives,and discussing the optimization scheme of farmers' cooperatives business model in China etc.