A Study On Financing In Farmers’ Professional Cooperation

In the late 1970s, the household contract responsibility system began to rise in our country. The establishment of this system greatly promoted farmers’incentive to produce. However, the system was not perfect and its defects was increasingly exposed with the development of social economy. A new economic organizations called farmers’ professional cooperatives were risen up luxuriantly and developed rapidly until the middle and later periods of 1990s, which kind of economic organizations could resist the market risk and gradually became a great power promoting the develop of agriculture, rural areas and farmers in our country.In recent years, the number of farmers’professional cooperatives in our country has been increasing rapidly, but the development of farmers’ professional cooperatives is still in the primary period. The number of farmers’professional cooperatives which have great influence and can improve greatly agricultural value-added is still less and forms an obvious comparison with the international booming cooperation. The most focusing problems restricting the development of farmers’ professional economic organization are the funds shortage and financing difficulties, which also can be said funds has been a key difficulty restricting the development of cooperative economic organization. The referring problems have been outstanding with the expand and growth of cooperative economic organization.In theory, the agricultural development bank, the credit union, the agricultural bank and other financial institutions supporting the agriculture have formed the huge rural financial system, which could afford funding needs for farmers’ professional cooperatives. However, some financial institutions refused to provide funds for cooperatives belonging to the groups of early stage, mortgage shortage, and small scale to decrease funding risks due to the asymmetric information. The government’s support for the farmer’s professional cooperative is insufficient and unclear. Meanwhile, the internal property rights of farmers’ professional cooperatives is also unclear. The series of problems have seriously affected the cooperative’s financing. This paper will construct a system of internal and external financing models for reference from the points of asymmetric information and internal property improvement between governments and cooperatives, which could promote the healthy and rapid development of farmers’ professional cooperatives.