Mechanism Of Farmers’ Organization On Condition Of Land Marketing

How to organize the farmers to increase their agricultural products and revenue? This isa question. There emerged variety kinds of organizations competing and paralleling but itseems none to be chosen as the best answer because the economic environment has changed.The farmers prefer to join the organization which owns their land the most production insteadof the organization itself. So it calls for a new answer to this question on condition of landmarketing.In this paper, organization capital theory was used to explain the substance of thefarmers’ organization: an organization process which collects the dispersed farmers togetherto accumulate a particular form of organization capital and creates excess values with it. Thisis the tentative use of organizational capital theory in agricultural economics. To test thishypothesis, the degree of farmers’ organization level was quantified by organizational capitaland macroeconomic statistics and field research data was collected to analyze the mechanismhow organizational capital influences farmers’ income and production.Firstly, this paper assesses the impact of organization capital (OC) on greenhousevegetable production using a macro panel data of greenhouse tomatoes. OC is proxy byindirect expense, an income statement item. Based on C-D production function, three modelswere built to explain the mechanism OC affects the production of greenhouse vegetables.Then, the influence of OC on farmer’ income was assessed with the data collected from afield investigation project. To make the results more realistic, the heterogeneity of laborconditions and land-scale were taken into consideration. Lastly, it confirms thatorganizational capital has a high positive impact on rural households’ farm income and theresult performs strong when the family and social control variables were taken into models.Here are a few main conclusions:First, organizational capital is synonymous with farmers’ organizations. Organizationalcapital is attached to the organization and creates excessive economic interests by a jointaction with other input elements. By this property, organizational capital can be used toexplain organizational boundaries and the nature of the enterprise. The farmers’ organizationprovides a way to save transaction costs and improve efficiency and enhance the market competitiveness by gathering the dispersed farmers and sharing synergy and cluster effect. Sothey both share the same theoretical basis and practical basis from the perspective of capitalinvestment, namely, the benefit farmers gaining from their organizations is the organizationcapital.The second, the organization capital have a strong effect on vegetable production. Fortomatoes, annual growth contributions reaches1.93%.Further analysis showed that:organizational capital has been a necessary input factor in greenhouse vegetable productionand this factor has a substitution effect of material inputs and labor input, moreover, OC isable to weaken the adverse effects caused by bad climatic conditions. Not only bysubstitution, has OC also impacted the productions in an indirect way—by taking technologyas a mediating variable. These prove that the tacit knowledge--Organizationalcapital—increases the production mainly by improving the efficiency of other inputs.Third, the influence effect of organizational capital on farmers ’ income is significantand robust and agricultural land scale is the core limiting elements. Considering theheterogeneity of household labor and land marketing conditions, organizational capital stillhas a strong positive effect on household income, variable elasticity coefficient equals0.366while the income elasticity of land variable is0.357. Taken home control variables and socialcontrol variables into models, main results remain robust. This proves that the organizationcapital impact greater and more flexible on agricultural income than on production. Humancapital elasticity coefficient is significantly negative, indicating that under market conditions,as opposed to limited farming land, human capital investment in agricultural production hasreached saturation. the relationship between Organizational capital and farmers’ incomesignificantly affected by village-level control variables, to be specific, farmers’ agriculturalincome negatively correlated with village income and positively correlated with villagepopulation. It indicated that agricultural land is a key factor limiting farmers’ income. Themarketing transfer of agricultural land should be accelerated so as to promote farmers’income by farming a moderate scale of land. And in this way, farmers will benefit from boththeir land and the organization maximizing the benefits of capital investment.Finally we make an analysis to the final results and propose rationalization for farmers’organization capital investment and policy makers.