Kaihua LIU

Yangtze Normal University, Fuling, Chongqing 408100, China

Abstract Farmers’ cooperatives are an important force to promote agricultural and rural modernization and rural revitalization. From an investigation, it is found that the development of some farmers’ cooperatives is not standardized. Prominent problems are as follows: firstly, the operating mechanism is not standardized, and there is a contradiction between democratic decision-making and management efficiency; secondly, the supervision and management are not standardized, and some cooperatives even resort to deceit to obtain financial subsidies; thirdly, the distribution mechanism is not standardized, and core members invade the interests of small peasant households, so the motivation of ordinary peasant households to participate in cooperatives is not high. It is recommended to strengthen the assessment and supervision of cooperatives, implement the "late funding" model, improve the efficiency of financial support, strengthen the training of farmers, establish a interest linkage mechanism of farmers and cooperatives, protect the rights of members, and promote the standardized development of farmers’ cooperatives.

Key words Farmers’ cooperatives, Development, Path

1 Introduction

Farmers’ cooperatives are the main carrier and important force for promoting the modernization of agriculture and rural areas and the revitalization of rural areas. The report of the 19th National Congress of the Communist Party of China put forward "the strategy for implementing rural revitalization". In 2019, the first document of the Central Committee called for "prominently focusing on the two new types of agricultural business entities of family farms and farmers cooperatives" and "developing norms and improving actions of farmers’ cooperatives". Since the reform and opening up, farmers’ cooperatives in China have developed rapidly, but at the same time, problems such as low economic and social benefits, and poor ability to drive farmers to become rich have also appeared. Therefore, it is of great significance and value to find out the development plight of farmers’ cooperatives and explore their standardized promotion paths for cultivating new kinetic energy for cultivating new kinetic energy for agricultural and rural development and realizing rural revitalization.

2 Development Status of Farmers’ Cooperatives

2.1 Farmers’ cooperatives have developed rapidly, but are not standardizedSince the implementation of theLawonFarmers’ProfessionalCooperativesin 2007, farmers’ cooperatives in China have developed rapidly. According to the data from the Ministry of Agriculture, by the end of 2018, the number of the cooperatives had exceeded 2.3 million, and the number of farmer households joining the cooperatives had reached 120 million, exceeding 50% of the total number of farmer households in China. However, the quality of the cooperatives is uneven. According to the report ofXinhuanet, more than 80% of the cooperatives have become empty shells, and some cooperatives have even cheated. From a survey, it is found that non-standard cooperatives accounted for as high as 72%, of which 51% were shell cooperatives with no cooperation and no operations, 21% had operations but no substantial farmer cooperation, and only 28% had standardized operations[1]. There are even fewer cooperatives that improve farmers’ income, and farmers’ cooperatives are facing a more serious crisis of trust.

2.2 Typical models of farmers’ cooperativesAccording to the investigation of this research group, most farmers’ cooperatives in Chongqing are run based on planting industry and aquaculture at present, accounting for more than 90%. The proportion of other cooperatives such as agricultural machinery cooperatives and processing service cooperatives is small. The main cooperation modes are shown in Table 1.

2.3 Farmers’ cooperatives promote rural governance and rural civilizationFarmers’ cooperatives use economic interests as a link to promote farmers’ participation in rural social governance, broadly unite the peasant masses, close party-group relations, and play the role of community self-governance. The cooperatives strengthen their internal management, form a standardized member congress, supervisory board, and council, strictly abide by the established guidelines, fulfill their obligations, and adhere to the basic guidelines of "membership ownership, conscious management, and member benefits". At the same time, farmers’ cooperatives hire technical experts to carry out agricultural technology training, improve the knowledge and skills of members. The cooperatives promote the spirit of solidarity and mutual assistance, propel rural spiritual and cultural construction, and promote the construction of rural customs and civilization.

Table 1 Main models and characteristics of farmers’ cooperatives

3 Problems Existing in the Standardized Development of Farmers’ Cooperatives

3.1 Core members dominate income distribution and encroach on the interests of small peasant householdsTheLawonFarmers’ProfessionalCooperativesstipulates that democratic management is implemented, but it is not implemented in the actual operation of the cooperatives. The main reason is that the quality of members is highly uneven, and a few core members control the distribution of benefits of cooperatives. The management and supervision of the cooperative are "monopolized" and "hidden operation" by core members. The management and supervision level of cooperatives are "monopolized" and "operated secretly" by core members. In addition, because farmers’ cooperatives require 60% of profits to be distributed fairly among members, the managers of cooperatives have not been motivated to improve their management, which has also prompted the management level of cooperatives to be opportunistic. At present, there is a phenomenon of alienation of surplus distribution in cooperatives. Dividends based on share capital have become mainstream. There are rare second-order rebates according to patronage levels. The principal-agent problem is more prominent.

3.2 Supervision and incentive mechanism is not standardized, and the motivation for cooperative development is insufficientFirstly, supervision mechanism is not standardized. At present, in the development process of farmers’ cooperatives, due to the fact that their business involves different administrative departments, a situation of cross-management is formed, and the lack of long-term effective supervision by a unified competent authority has led to a large number of irregularities in the operation of cooperatives. Although most farmers’ cooperatives are registered in the industry and commerce department, and also make institutional regulations on the shareholding structure, decision-making mechanism, and distribution mechanism, these systems mostly become formalistic. The member assembly, as the highest authority, is not actually held regularly. Many problems, such as inadequate democratic management within the cooperatives, and opaque financial systems, have weakened the internal management of agricultural and industrial professional cooperatives. Secondly, incentive mechanism is not standardized. Due to the heterogeneity of cooperative members, it is difficult to take into account the interests of all parties, which increases the difficulty of internal coordination. A large number of cooperatives have been severely shelled, and core members have received preferential policy benefits. However, too harsh supervision of cooperatives increases the rent-seeking cost of cooperatives and reduces the enthusiasm of core members to improve their management.

3.3 Farmers’ sense of cooperation is weak, and there is a "free-riding" behaviorFarmers’ cooperatives improve the ability of a single peasant household to negotiate in the market economy to resist the fluctuation risk of market price, which is conducive to improving the long-term benefits of each peasant household. However, many members join cooperatives not for production cooperation, and have a "free-riding" mentality. Some members have a weak sense of cooperation and make decisions based on short-term benefits. When cooperatives are more profitable, they choose "free riding" to expect to get a share. When the benefit of cooperatives is not good or the market price is higher than the order price of cooperatives, they do not cooperate and undermine cooperation. Therefore, in order to realize the sustainable development of farmers’ cooperatives and attract more farmers to join cooperatives, cooperatives must always have very good economic benefit, or members themselves have a good sense of cooperation and a high level of morality. However, these two conditions cannot be met at present, so that the development of farmers’ cooperatives faces a dilemma.

4 Realistic paths for standardized development of farmers’ cooperatives

4.1 Implementing the "late funding" principle to improve the efficiency of financial supportIt is necessary to strengthen the evaluation and supervision of cooperatives, and implement the "late funding" principle. That is, after farmers’ cooperatives produce economic and social benefits, they are given policy support, including tax relief, project support, production subsidies,etc. to avoid phenomena such as fraud and falsification of cooperatives and arbitrage of financial subsidies. The government should comprehensively consider the economic, social and ecological effects, evaluate the performance of farmers’ cooperatives, strengthen the supervision and management of financial input funds, understand the use of financial funds in a timely manner, ensure the reasonable application of financial funds, prevent the unreasonable distribution of financial funds from affecting the fair competition and healthy development of cooperatives, make the financial support funds of cooperatives more used for training of members, infrastructure construction, purchase of production materials, technology promotion services,etc., enhance the specialization of production and standardization of products, and improve the performance of cooperatives. At the same time, cooperatives are non-profit organizations, and the products they provide are quasi-public goods in rural areas. They are concerned about vulnerable industries and groups. The targets of government financial support should not only favor large-scale and well-demonstrated cooperatives, but also increase support for ordinary cooperatives. The scope of funding and subsidy support should be expanded to let fiscal funds play a greater role.

4.2 Making full use of Internet+to improve the comprehensive service capability of farmers’ cooperativesBy using modern technologies such as Internet +, Internet of Things, and big data, the development of agricultural productive, operational, and financial service systems is accelerated to effectively provide agricultural socialization services to small peasant households. At first, agricultural productive services, such as the promotion of agricultural technology, land trusteeship, farming and planting, unified prevention and control, drying collection and storage,etc., should be provided to improve the management level and service quality of farmers’ cooperatives. Secondly, agricultural socialization services should be provided. Through the docking of agricultural grants, the docking of agricultural supermarkets, and the docking of rural communities, the e-commerce platform, information service platform and a communication service platform of agricultural products are set up, and the yield and output value of agricultural products are improved. Thirdly, financial services should be provided. Financial repression and financial exclusion in agriculture and rural areas are widespread, and there exist problems such as high financing costs, strict mortgage methods, and unequal opportunities. Based on the characteristics of Internet+big data technology such as low cost, high efficiency, and wide coverage, as well as village-level development mutual aid funds guided by financial funds, a large-scale and sustainable agricultural socialization comprehensive service system should be established to effectively promote farmers’ production and planting, increase farmers’ income, and promote rural revitalization.

4.3 Strengthening farmer training and raising the management level of cooperatives and cooperation awareness of farmer householdsFirstly, it is necessary to strengthen theoretical guidance and improve the quality of members. It is necessary to make full use of publications, websites, mobile internet and other platforms to establish a market information system and transmit market demand information, rural economic information, and practical technical information to farmers’ cooperatives, strengthen the training of policies for affordable agriculture, regulating production and construction, legally managing finance, and innovating production and marketing concepts and improving marketing skills, comprehensively improve the theoretical level and overall quality of farmers, and enhance the cooperation awareness of members. Secondly, it is needed to strengthen practical guidance and cultivate new professional farmers. Cooperatives need high-quality leaders, but in the actual process, their promoters are basically from farmers who have low education and lack modern management concepts. Government departments organize cooperative leaders, large breeders, and ordinary members to conduct regular learning and training, so that more farmers can "be educated, understand technology, know how to manage, and be good at management", and their self-development capability is improved. Thirdly, it is necessary to organize learning and observation. Industry exchange meetings, experience report meetings, and remote investigations are conducted to make farmers fully learn successful production experience, understand advanced scientific production knowledge and technology, and have more sufficient and more cutting-edge information to increase the confidence of farmers as members to develop farmers’ cooperatives.

4.4 Establishing interest linkage mechanism to stimulate cooperative norms and increase motivationAt first, grassroots party organizations are used to achieve democratic management. It is necessary to give full play to the exemplary role of party members, strictly follow the requirements of various laws and regulations, regularly hold member congresses, councils, and supervisory committees on time, regulate the operation of cooperatives, improve efficiency, and protect the interests of members. Secondly, the incentive mechanism is improved to stimulate the motivation of managers. The talent of core members who are the most valuable human resources of farmers’ professional cooperatives is the key to the development of cooperatives. To exert their talents, it is necessary to establish a certain incentive mechanism, give them the residual control and surplus right of cooperatives to match rights with talent. Thirdly, a mechanism for linking interests should be established to stimulate the enthusiasm of members. Cooperative members have cooperative relationship, instead of competitive relationship. The main function of cooperatives is to provide services to members, and cooperatives and members can form an interest linkage mechanism of "risk sharing and benefit sharing".