Kong Xiangzhi: Developing Cooperatives and Improving the Agricultural Socialized Service System

the No. 1 document of the Central Committee in 2014 pointed out that "vigorously develop socialized services with diversified subjects, diverse forms and full competition, and promote cooperative, order-based, managed and other service models." it points out the direction of the construction of China's agricultural socialized service system in 2014 and for a period of time in the future, and also explains the important position of farmers' cooperatives in the agricultural socialized service system.

Agricultural Policy in the New Century Attaches Great Importance to the Role of Service Subject of Farmer Cooperatives

from the very beginning, farmers' cooperatives have shown the function of providing various services for farmers before, during and after production; early cooperative organizations can at least play a role in providing market information and alleviate the difficulty of selling agricultural products to a certain extent. Therefore, after entering the new century, especially the launch of the legislative work of the the People's Republic of China Farmers' Professional Cooperative Law in 2003, the party and the government attach great importance to the role of cooperatives in the construction of the agricultural socialized service system, which is fully reflected in the 11 central No. 1 documents (Table 1).

In addition to the 11 Central Committee No. 1 documents, when the Third Plenary Session of the 17th Central Committee of the Communist Party of China deployed the establishment of a new type of agricultural socialized service system, it was proposed to "accelerate the construction of public service institutions as the support, cooperative economic organizations as the foundation, leading enterprises as the backbone, and other societies. A new type of agricultural socialized service system that combines public welfare services and business services, and coordinates special services and comprehensive services", "Support supply and marketing cooperatives, farmers' professional cooperatives, professional service companies, professional technical associations, farmers' brokers, leading enterprises, etc. to provide various forms of production and operation services". It can be seen that the third Plenary session of the 17th CPC Central Committee believes that farmers' cooperatives play a fundamental role in the construction of agricultural socialized service system and must be vigorously developed.

What services can farmer cooperatives provide to farmers

first, to achieve "sell high and buy low" by means of joint purchases and joint sales ". In recent years, the problem of difficulty in selling agricultural products has often occurred, making farmers in structural adjustment often helpless, or follow their feelings, or have no way to go. First of all, determined by the characteristics of agricultural production and agricultural products, whether in the purchase of production factors or the sale of agricultural products, China's 0.2 billion scattered small farmers are at a disadvantage in the market. There is a buyer's monopoly in the sale of agricultural products and a seller's monopoly in the supply of agricultural means of production. Secondly, information asymmetry, an effective market depends on the ability of enterprises to obtain the information needed for production, sales and purchase in a timely manner, mainly the price information of goods. However, it is difficult for scattered small farmers to obtain complete, accurate and timely market information, and there is an information monopoly on farmers in the market. Some people who provide services and production materials for agriculture or purchase agricultural products deliberately conceal information for their own interests. Tell the farmers the truth. This information asymmetry causes distortions in the distribution of resources and increases the blindness of farmers in production, purchase and sales. In underdeveloped areas with poor market information and poor sales channels, small-area demonstration and trial planting of new products generally do not worry about sales. Once a large area is pushed out, sales will be a big problem.

After farmers form cooperatives, on the one hand, they can reduce transaction costs, on the other hand, they are conducive to obtaining returns to scale. Cooperatives provide an institutional environment in which scattered individuals can unite to form mutual aid groups. On the premise of maintaining independent property subjects and business subjects, scattered farmers can reduce the sales cost per unit of agricultural products or the purchase cost of agricultural inputs and services through the combination of transaction links such as collective sales of agricultural products or collective purchase of agricultural inputs, and realize economies of scale before and after production.

Second, in the production process, cooperatives enable farmers to smoothly connect with the market by providing information and technical services. First of all, joining the agricultural cooperative economic organization is conducive to reducing the cost of farmers to learn and use technology. The cooperative hires technical experts in the name of the organization to provide guidance. As long as the participating farmers can benefit, there is no need to pay additional learning fees. Or a skilled person in a cooperative who teaches technology to other members of the organization will also save farmers the cost of learning technology. Second, joining cooperatives helps increase the channels for farmers to adopt new technologies. The tasks of cooperatives are many, the most important of which is to provide members with advanced and applicable technology. Joining cooperatives helps increase farmers' access to new technologies. Thirdly, farmers' cooperatives are conducive to improving the efficiency of technology use and reducing the cost of agricultural technology extension. The use of some technologies has externalities, and the use of such technologies by one family will benefit neighboring farmers. Finally, in a cooperative, it is often those farmers who have the courage and dare to take risks to take the lead in adopting new technologies. Their exemplary role is conducive to increasing the enthusiasm of other farmers to use technology and reducing the risk of investing in new technologies.

Third, to obtain scale gains and achieve economies of scale. Cooperatives can not only achieve pre-and post-natal economies of scale through centralized purchase and marketing, but also provide common services and generate additional income for grass-roots cooperatives through federations. After the cooperative has developed to a certain stage, it is necessary to unite in a larger scope, which can reduce transaction costs in a larger area, occupy a larger market share, and provide more services to its members.

development trend

by the end of November 2013, there were 950700 farmers' cooperatives registered according to law, with 72.21 million members, accounting for 27.8 percent of the total number of farmers. Cooperatives are playing a role in the construction of agricultural socialized service system that other subjects cannot match. In 2014 and a longer period of time, farmer cooperatives are showing a trend of integration, materialization and standardization, and are playing an increasingly important role in agricultural economic activities.

Unification. The increasingly fierce market environment requires farmers' cooperatives to further improve their business scale and market competitiveness, and the establishment of cooperatives through "re cooperation" is undoubtedly the best way for cooperatives to become bigger and stronger. At present, Hubei, Shandong and other provinces have passed local laws and regulations on the establishment of cooperatives, and many provinces have also included provisions to promote the development of cooperatives in local laws and regulations on the development of cooperatives. It can be predicted that 2014 will be a year for the great alliance of cooperatives, and it will also be a year for exploring the way of "re cooperation" in the alliance and seeking the best interests of member societies. The united cooperatives have stronger service capabilities and more services for farmers.

Materialized. In recent years, cooperatives have more and more substantive business operations, such as transferring land to build production bases, providing members with cheap and high-quality raw materials through the establishment of raw material production enterprises (such as feed factories of livestock and poultry production cooperatives), and establishing direct sales in urban communities to realize the docking of agricultural cooperatives. A large number of cooperatives are no longer satisfied with the loose cooperation of providing only members with information and technical services in the early stage, the shift to forming entities brought farmers closer together. In 2014, there will be more and more materialized cooperative societies, and the social services provided to members will be more practical and specific.

Normalization. Materialization and demutualization are twins, and increasingly materialized cooperatives inevitably require all members to invest in shares, and the concentration of cooperative shares in a few people is bound to be fundamentally changed. The decentralization of shares also makes the general members more concerned about and participate in the decision-making of the cooperative, and constantly improve the decision-making mechanism of the cooperative. The standardized cooperatives in the union will also provide experience for other cooperatives and gradually standardize them.

The Interim Measures for the Evaluation and Monitoring of National Farmer Professional Cooperative Demonstration Societies has been formally implemented on December 13, 2013. It has put forward higher requirements for national demonstration cooperatives in seven aspects: registration and establishment according to law, implementation of democratic management, standardized financial management, strong economic strength, obvious service effect, product (service) quality and safety, and good social reputation, it will inevitably lead to the standardized development of provincial, municipal and county demonstration cooperatives and all cooperatives. A standardized cooperative will inevitably provide its members with standardized, high-quality and comprehensive services.