A Study Assessing The Trust,Contracts And Cooperative Stability Of Farmers

Cooperation is an inexhaustible driving force to promote social development,and the stability of cooperative relationships is an important condition to guarantee the sustainable profitability of farmers and the effective sharing of production and management risks.In the real situation of transition from planned economy to market economy and from traditional rural society to modern contract society,the solidified transaction mode of traditional society is broken,which makes it necessary for people and organizations to cooperate with each other to realize the enhancement of benefits and prevention of risks.The contradiction between small production and large market,the weakness of the agricultural industry and the complexity of the external environment,the risks and uncertainties faced by farmers have increased,and farmers cooperation is intended to cope with the vertical integration of the external market through the horizontal integration of farmers,but at present,the degree of cooperation between farmers in China is not deep enough,and the prospects of cooperation are not optimistic.In the process of cooperative development,there are problems such as farmers’ withdrawal,breach of contract,"free-riding","elite capture","large farmers eating small farmers",etc.,which are not conducive to sustainable and stable cooperation.In the process of cooperative development,there are problems that are not conducive to the sustainability and stability of cooperatives.In the modern market economy system,trust is its most fundamental ethical feature and contract is its most fundamental institutional feature.The two jointly build the market economy as the foundation of credit economy and law economy.Through combing and analyzing the existing literature,we found that trust and contract play a crucial role in enhancing the stability of farmers’ cooperation from market and institutional perspectives,as trust can deepen farmers’ emotional and instrumental identification with the cooperative partners,and contract can coordinate and control the factors that are not conducive to the stability of cooperation in the process of farmers’ production and cooperation.Therefore,it is of great theoretical value and practical significance to study the factors influencing the stability of different types of farmer’s cooperation from the perspectives of trust and contract,in order to provide reference and reference for the government to formulate policies for the organic linkage between small farmers and modern agriculture and to improve the efficiency of small farmers’ organization.Based on the systematic review and analysis of existing literature,transaction cost theory,principal agent theory,incomplete contract theory,Giddens trust theory,and social exchange theory,this paper uses the primary data of 513 farmers in 31 plantation cooperatives in Heyang,Zhouzhi,Zhenba,Huangling,and Fuxian counties of Shaanxi Province during 2020 to 2021.Farmers’ cooperative stability was measured from the dimensions of cooperative satisfaction and cooperative persistence,and the factors influencing farmers’ cooperative stability were explored from the perspective of trust and contract.Firstly,we analyzed the current situation and problems of production cooperation in farmers’ cooperatives,and measured the core variables of trust,contract,and stability of farmers’ cooperation based on the construction of an index system;secondly,we examined the direct effects of trust and contract on the stability of different types of farmers’ cooperation and their mechanisms of action,and compared the differences between interpersonal trust and systematic trust,contract coordination,and contract control on the stability of different types of farmers’ cooperation.We investigate the indirect effects of trust and contract on the stability of farmers’ cooperation and their mechanisms of action,and identify whether there are "substitution" or "complementary" effects of trust and contract on the stability of different types of farmers’ cooperation under the interaction.Finally,based on the empirical analysis,we propose policy recommendations to improve the stability of farmers’ cooperation.The main conclusions of the study are as follows:(1)There are still many practical problems in the development of farmers’ cooperatives.By analyzing the types,ways,and reasons of farmers joining farmers’ cooperatives,factor inputs,the way of cooperative dividends,the way of price agreement,the duration of contract signing,and the reality of contract implementation,it is found that farmers’ cooperatives have serious heterogeneity,low level of socialization services,imperfect benefit mechanisms,and differences in risk sharing mechanisms.(2)Constructing the index dimension system of farmers’ trust,classifying trust into interpersonal trust and system trust,and measuring and characterizing farmers’ trust,we found that there are significant differences in farmers’ trust characteristics under different classifications.Trust has a significant positive influence on farmers’ cooperative stability with a significant enhancement effect,but the degree of influence on core members is higher than that of ordinary members;the combination of interpersonal trust and systematic trust can well solve the problem of cooperative stability between different types of farmers in production cooperation,where the influence of interpersonal trust on core members is higher than that of systematic trust,and the influence of interpersonal trust on ordinary members is smaller than that of systematic trust.Overall,trust significantly improves the stability of farmer cooperation and passes the robustness test,in which the maintenance of cooperative relationships for core members is mainly through the trust mechanism.(3)By constructing the index dimension system of the contract,from the contract goal function,we will classify the contract into contract coordination and contract control,measure and characterize the contract,and find that there are significant differences in the contract characteristics of farmers under different classifications.Both contract coordination and contract control have significant positive effects on farmers’ cooperative stability,among which the degree of influence of contract coordination on core members varies among indicators but is higher than that of contract control in general,and the degree of influence of contract control on ordinary members is higher than that of contract coordination.In general,the contract can significantly improve the stability of farmer cooperation and pass the robustness test,in which the maintenance of a cooperative relationship for ordinary members is mainly through the contract mechanism.(4)The interaction of trust and contract has a significant positive effect on the cooperative stability of farm households,and there are differences in the effects on different types of farm households.The interaction between trust and contract makes the inhibitory effect of trust on farmers’ cooperative stability,cooperative satisfaction,and cooperative persistence obvious,among which the inhibitory effect on core members is much larger than that on ordinary members,specifically,there is a substitution relationship between trust and contract in the effect on cooperative stability and cooperative satisfaction of core members(trust substitutes contract)and a complementary relationship in the effect on cooperative persistence(mutually reinforcing).This study is a useful addition to and development of the existing research on cooperative stability,and provides a reasonable explanation for the current debate on the "substitution" or "complementary" relationship between trust and contract,i.e.,in the process of farmer production cooperation,trust and In the process of farmer production cooperation,trust and contract exist simultaneously,sometimes in a "substitution" relationship and sometimes in a "complementary" relationship for different scenarios.The theoretical hypothesis of "trust at the core and contract at the periphery" is proposed and argued,that is,the relationship maintenance with core members mainly relies on trust mechanism,while the relationship maintenance with ordinary members mainly relies on contract mechanism,and cooperative organizations should apply trust and contract mechanisms for core and ordinary members according to different scenarios,so as to realize the lasting stability of cooperative relationships.The cooperative organization should use trust and contract mechanisms for both core members and ordinary members according to different scenarios,so as to achieve lasting stability of cooperative relationships.Based on the theoretical analysis and empirical findings,this study proposes the following policy recommendations: constructing a long-term mechanism to improve the stability of farmers’ cooperation,improving the service level of farmers’ cooperatives and sound cooperation guarantee mechanism,the improvement path of farmers’ cooperation stability based on trust and contract perspective and the improvement path of farmers’ cooperation stability based on trust and contract synergistic drive.