Information Asymmetric, Heterogeneity Of Cooperatives And Bargaining Power

The nation's agricultural production increases in years continuously, while the farmers are stuck in a vicious circle in which production increases while income does not. Agricultural production faces the pressure of continuously increasing cost, while marketing difficulties in melons, fruits and vegetables happen occasionally. At the same time, the phenomenon of expensive rice and cheap unhusked rice exists pervasively in agricultural product producing and retailing fields. All these manifest that when farmers sell their products, the retailing price cannot present the product's value or even be very low. Thus the disadvantageous position in farmers' negotiation ability confines the increase in their income and their activity in reproduction, leading to adverse influence in the development of rural economy.In this case, central government has launched policies to ensure increase in farmers' income many times. In 2014, No 1 Central Document points out again that system of supporting and protecting agriculture should be strengthened, fiscal policies supporting farmers should be perfected and spending on rural economy, rural development and rural demography should be increased. However, subsidies directly on farmers greatly will severely aggravate government finance burden. So analyzing the negotiation power of farmers' cooperative society in product market to ensure initiative increase in farmers' income is particularly urgent and is getting more realistic significance.New classical economics always regard agricultural product market as a perfect competition market. However, as unnegligible gap always exists between reality and ideal, severe information asymmetry exists in agricultural product market. In terms of solving the information asymmetry phenomenon and promoting agricultural product producers' negotiation ability, one important view is that joining the farmers' cooperative society can improve farmers' negotiation ability. Research related in farmers' cooperative society negotiation ability mostly stays on qualitative description and lack support from theoretical analysis. The negotiation ability improves after joining the cooperative society, but what's the degree of existing cooperative societies' negotiation ability? Are they still in a disadvantageous position during negotiation with assemblers or not? Up to now, no empirical analysis related can answer these questions.This paper makes the following extension on the previous basis. First,this article uses SD curve to analyse the bargain mechanism of cooperatives and buyers under the condition of information asymmetry.Second,this paper measures the cooperatives' barga ining power using Two-tier Stochastic model and 100 copies of the survey data about farmers' professional co-operatives in Shaanxi province.The research results show that:(1)buyers' bargaining power is stronger than coope ratives,and agricultural product price is 16.46 lower than the standard one on average;(2)most of cooperatives are at a disadvantage in bargaining;(3)Size and establishment period of cooperatives have a positive effect on co-operatives' bargaining power.Based on research results already been attained, this paper gives a series of advice on farmers' cooperative society development. The paper aims to improve farmers' cooperative society's negotiation ability and alleviate the degree of information asymmetry between farmers' cooperative society and product assemblers to promote farmers' cooperative society's further development.