An Empirical Study On The Factors Influencing Farmers' Behaviors Of Decision-making In Dairy Industry Development

Subject: An empirical study on the factors influencing farmers' behaviors of decision-making in dairy industry development. Name: Hua heliang. Adviser: Professor Liou. Specialty: Crop Cultivation. Study Direction: Agricultural extension and management. College: College of Humanities and Development. Application date: April,2004.The development of economic globalization and entering WTO brought about very severe challenges to the agricultural economy in China. The development of agricultural industrialization is the inevitable countenneasure to meet the challenges. Chinese fanners encountered a lot of difficulties in their participation in the industrialization process with direct facing the market. This thesis made an empirical study on the factors influencing farmers' behaviors of decision-making in the industrialization of dairy production in Yangzhou Municipality.The main form of dairy production industrialization is the one of "Company plus dairy households". It was since 1999 that the households have involved in dairy production. Most of the fresh milk are supplied by the farm households who are the foundation of dairy product industrialization in Yangzhou Municipality. Favorable policies have played the important roles in the process of farmers' decision-making to participate in the dairy production. It was started by a few "capable farmers" in order to get higher profit. The other dairy farm households were attracted to involve in dairy production by the well expectation, positive demonstration or promotion by the government, and favorable policies. The farm households in Yangzhou have no tradition to raise dairy cows. The number of cows is limited because of the high demand for the initial investment. The dairy farmers lack the knowledge and skills of cow rearing and management experiences. And the manner to raise cows is quite backward.All the stakeholders of dairy product industrialization are common in pursuing the maximum of profit and minimum of risks, but have conflicts in the interests such as the transaction prices and avoiding risks. The contract-based dairy production is the principal form of industrialization, which favors the reduction of dairy farmers' risk. However, there are only a few enterprises to purchase fresh milk in Yangzhou Municipality, and limited options for farmers to choose. They are in a disadvantageous position in bargaining with the enterprises, and often the passive acceptors of the transaction manner and prices. The enterprises hold the dominant and monopoly position. The situation of their production and management - good or bad - has the significant impact on the benefit of the dairy farm households. Due to the constraints of the limited resources, it is easy for the households to take the opportunism attitude.