NPR - BUSINESS OPERATION STATUS OF CHINESE FARMER COOPERATIVES: A 6-YEAR TRACKING INVESTIGATION OF COOPERATIVE A

Abstract

The number of farmer cooperatives in China increased dramatically after implementation of the Farmer Cooperative Law in 2007. Based on a 6-year tracking investigation of Cooperative A in Zhejiang Province, we employ a descriptive and case study approach to provide an in-depth understanding of the operation status of farmer cooperatives after introduction of the Cooperative Law, and attempt to discover how cooperative directors seek diversified development paths while regarding the farmer cooperative as the basis. This paper finds that obtaining subsidies from the government is one of the main objectives for the establishment of farmer cooperatives. Farmer cooperatives are not operated in accordance with traditional cooperative principals after establishment and there are operational problems, such as the cooperative director holding substantial power over common members and the lack of profit distribution mechanisms. Cooperatives implement diversified business models to achieve greater benefits (e.g. agritourism and fruit stores). Additionally, changes in organizational type from farmer cooperatives to family farms, to align with new policies, has also become increasingly prevalent. Finally, we conclude that most farmer cooperatives in Zhejiang Province are not true cooperatives, existing in name only. Both farmer cooperatives and family farms are Family-controlled Agribusiness Company-like Entities.

Keywords: Farmer Cooperative, Family Farm, Agribusiness Model Diversification, Family-controlled Agribusiness Company-like Entity