The Social Factors Investigation Of Scale Efficiency Failure Of Agricultural Enterprise

Through the deep investigation of management process and results of the agricultural enterprises in northern Anhui province of Z village, the author are trying to show the economic actions of large scale contract farmer in agribusiness, and how the economic actions embedded in the complicated social structure and subject to the constraints. With the comparison to the operation benefit of traditional small peasant mode, the author found that significant scale benefit does not exist in large scale agricultural enterprises.The paper mainly discusses the reasons for the social factors. That is, to carry on the analysis on the economic action from a multi-layer embeddedness perspective. The general economic action’s social embeddedness can deconstruct to political embeddedness, culture embeddedness, organization embeddedness, and interpersonal relationship embeddedness.Through the field investigation, the author took Z village of agricultural enterprises as the case of starting point and found that agricultural enterprise economic actions are restricted by many kinds of factors when in the process of embedding into the local society. From political embedding perspective, agricultural business economic actions are to be subject to the authority of structural constraints. The policy changes and the land are controlled by the village class organization make agricultural business owners did not receive the subsidies expected, which rose the improvement of the operation cost. From the cultural embedding level, economic actions are to be influenced by the cultural norms of acquaintances society. The agricultural enterprise management mixed with Chinese characteristics of nepotism, which deviated from Webb’s bureaucracy, leading to the rise in the cost of management and supervision. From organizational embedding perspective, the self-problem of bureaucratic system, such as the slow rigid hierarchy system and the existence of level benefits, are unable to adapt to the characteristics of the agricultural production, which combined natural property and social property together. Finally, the embedded interpersonal relationship caused the deviation of the objective of main profit maximization, so economic actions and economic decision-making shows blindness and indulgent. After all, these factors are responsible for the low scale efficiency of agricultural enterprise. Based on the research findings above, the author puts forward that the Medium-scale family farm management are more suitable to the present situation of China’s rural areas.