Analysis Of Agency Organization Of Contract Hire System Of Agricultural Machinery On Neo-institutional Economics

Agricultural Mechanization is the inevitable way leading to Agricultural Modernization in China. For the property rights of cropland and the efficiency of the combine, it is impossibility and unnecessary that Chinese farmer buy a combine harvester solely for reaping his crop. Therefore the Contract Hire System (CHS) of Agricultural Machinery becomes the elementary pattern of Agricultural Mechanization in China; the development of the CHS restricts the progress of Chinese Agricultural Mechanization. The agency organization is an important proportion of the CHS. Not only is it the requirement of division and specialization in the CHS, but does it exist as the case stands. There are many problems with regard to institutions of the agency organization and the CHS. If we can not explain them by advisable theories, and offer proper solution, the progress of the CHS will be cumbered badly. Hence the paper. The primary reference of this paper is results of the doctor fund item of the ministry of education《The systemic analysis theory and positive research of the market of CHS》,and it bases on the correlative theory of the Neo-institutional Economics, backs on the development course of the cross-zone mechanized harvest of wheat. Ground on the frame of the Neo-institutional Economics, the paper used the theory of property rights, analytical method of transaction costs, contract Economics and game theory. The content of the paper can be generalized as follows: Analysis of disadvantages of Chinese CHS'development, explanation of influences the combine property rights'pattern on the production efficiency of the combine harvester and on deciding the relation between the agency and the driver of the combine, discussion of transaction costs of the intestine exchange of the CHS and reasons that these costs come into being, and a conclusion that the pattern of intestine exchange is an institutional arrangement for dividing up the appropriable quasi-rent of the combine harvester. Basing on agency theory ,it analyzes characters of the contract in the CHS'intestine exchange, and points out that this contract is a share contract which has been chosen in economy practices because supervisory costs and the risk of exchanges of the CHS in market. Supervisory costs come from ex post facto informational asymmetry. The paper indicates that this kind of share contracts can solve supervisory and invigorative problems about the intestine exchange in the CHS, and defines a qualitative model of this share contract. Studies on the development mechanism of the agency organization of the CHS and the rule of that our government administers the CHS. It points out that development of the agency organization conditions that the rule suits the development mechanism. At last, the paper added all of the reference documents. The paper is divided into seven chapters as follows: Chapter one, Introduction, discusses the background and meaning of the research. In this part we also introduce the main content, methods used in it and technological route. Chapter two, summarize of the CHS and its agency organization's development, introduces the concept of the CHS and its development in China, discusses significances of the agency organization and conditions of its development; emphasizes that this kind of conditions could be periodicity of agricultural production, social and economy circumstance, especially institutional conditions. Chapter three, property rights and organizational structure of the CHS, indicates that property rights is the object of intestine exchange, analyzes influences of the combine property rights'pattern on the production efficiency of the combine harvester and on deciding the relation between the agency and the driver of the combine. The paper points out, if property rights belong to the driver of combine, it is unnecessary to measure the cost of the combine harvester running, and to supervise the combine harvester running, and can ensure the investment in human resource of the special relationship in the CHS. Chapter four, transaction costs of the CHS and its intestine exchange, analyzes elements of this kind of transaction costs and reasons that these costs come into being; explains functions of the agency organization that can reduce transaction costs, and provides a conclusion that the pattern of intestine exchange is an institutional arrangement for dividing up the appropriable quasi-rent of the combine harvester. In the CHS, the driver of combine and the agency form a kind of special relationship on the combine harvester for reducing transaction costs, because it is too high that the cost of the driver dealing with farmers at first hand. It need expend cost in maintaining this relationship, it is called agency cost. So the scale of intestine exchange is limited when the reduction of the first cost equals to agency cost on marginal. Chapter five, analysis on contract theory of the CHS intestine exchange, discusses characters of contract in intestine exchange of the CHS,and points out that this contract is a share contract which has been chosen in economy practices because supervisory costs and the risk of exchanges of the CHS in market. Supervisory costs come from ex post facto informational asymmetry. The paper indicates that this kind of share contracts can solve supervisory and invigorative problems about the intestine exchange in the CHS, and defines a qualitative model of this share contract. Chapter six, study on development mechanism of the agency organization in the CHS, introduces the development mechanism of the agency, compares two paths of the agency development, discusses their advantages and disadvantages, analyzes the rule of that our government administers the CHS. It points out that development of the agency organization conditions that the rule suits the development mechanism. Chapter seven, draws the main creating points of the paper and present the...