The Chioce Of Linkages Between Smallholders And Large Market

As the implementation of the household contract responsibility system in early 1980s, China's agricultural production presents small-scale and decentralized characteristics for the equal land allotment mechanism. Because of the limited land area and the rapid population growth, the scale of smallholders has been continuously shrinking and the field production has been further dispersed. On the other hand, some large supermarkets become the main retail channel, replacing of the conventional wet market and the stall-keeper. The retail and processing become scaling up and concentrated. In the background of smallholders and large market, wholesales, the original linkage can not fully satisfy the present need, we need new linkages between smallholders and large market.At present, there are two types of the linkages between smallholders and large market, including open market and non-open market. In the pattern of open market, buyers and sellers make decisions independently, according to the price and its change. The contractual relationship between buyers and sellers is one-off. In the pattern of non-open market, farmers and enterprises link through the benefit allotment mechanism, forming the long-term contractual relationship. However, regarding these two kind of pattern, one is by no means better than the other, and is not suitable for all farm products. That is the characteristic of farm products each pattern suits is different.Therefore, the arm of this study is to analyze what is the characteristic of farm products each pattern suits, so as to provide basis for choosing different pattern. In the aspect of theoretical analysis, this study demonstrates that the pattern of open market is more suitable for the farm products which are close to perfect competition, while the pattern of non-open market is more suitable for the farm products which have monopoly profit by market segmentation, and can be excluded competition by controlling the production process. In the part of empirical analysis, firstly, on the basis of colleting the successful cases and non-successful cases about the pattern of non-open market, we summarize and compare the different characteristic of the farm products in different kind of cases. And secondly, we describe and analyze the pattern of linkages between Chaoda Group Nanjing Corporation and the smallholders. Through theoretical analysis and case study, we make the conclusions that the pattern of open market is more suitable for the farm products which are close to perfect competition, while the pattern of non-open market is more suitable for the farm products which have monopoly profit by market segmentation, and can be excluded competition by controlling the production process.