Study On Incomplete Contract Of Contract Farming

Contract farming comes forth with the process of the agricultural industrialization in our country. It is a kind of agriculture pattern, to which many people pay much attention. The background is single peasant and market lack effective connection between them, the contradiction is gradually sharp between small peasant and big market, rural economy development needs market organization innovation. It is beneficial to guiding architectural adjustment of agriculture, increasing the peasants' income, speeding up the step of agricultural science, Contract farming should have the broad prospect from these effects. However, the actual effect of contract farming in quite a part of place cannot meet people's expectation. The prospect of contract farming is extremely gloomy because 20% rates of agreement-honoring.Agricultural production management faces double risks from nature and market. The agricultural product characteristic and the price undulation aggravated the possibility which both sides breaks contract. The main manifestation of breaking contract is when market price goes up, peasant break contract and sell the products in the market; when market price goes down, the enterprise break contract and purchase products from market.At present, contract system arrangement cannot eliminate the price risk, just make the price risk shifts mutually between both sides. When the third part—court cannot carry out under coercion, opportunism behavior, moral hazard and reverse choice of both sides become necessary. This article tries to find the reason why the contract cannot carry out from completeness analysis aspect, thus find the way to solve this problem.The system Institutional economics points out: if a Institutional arrangement cannot meet individual's rationality, it is impossible to implement. Contract which does not conform with the efficient finally cannot carry out. even if stipulated strict punishment, increases the supervising and managing dynamics. Therefore, the solution is to build up benefit risk mechanism which according to economic principles. Only in this way, connect farming can get health development.This article is divided into five chapters. First chapter is a introduction, mainly elaborates the general concept and the background, goal and significance. Second chapter elaborates the incomplete contract; the third chapter analysis contract farming using incomplete contract and finally explain a behavior between both sides; Fourth chapter is case analysis. In this chapter, article quotes some successful and defeat case to prove the result of chapter 3; Fifth chapter mainly elaborates the industry organize innovation and application.