Agric. Econ. - Czech, 2012, 58(3):135-146 | DOI: 10.17221/17/2011-AGRICECON

Study on Chinese farmer cooperative economy organization and agricultural specialization

Dan Yang^1,2, Zimin Liu^2,3

¹ The Research Centre of Rural Economics and Management, Southwest University, Chongqing, China

² College of Economics and Management, Southwest University, Chongqing, China

³ Graduate School, The Chinese Academy of Social Sciences, Beijing, China

Under the background of the Chinese Household Contract Responsibility System (HCRS), farmers have to pay higher transaction costs and encounter a huge trading risk if they engage in agricultural production only through the market transaction. Since the special properties of agricultural production limit the formation and development of agricultural enterprises, farmer cooperative economy organizations with the main functional characteristics of transaction coordination begin to flourish. By building a new classical economics model, this paper demonstrates the theoretical assertion that the generation of a farmer cooperative economy organization is accompanied by the evolution of the division of labour, the improvement of farmers' effectiveness and the development of agricultural specialization. Furthermore, this paper does an empirical analysis with the micro-survey data to verify this theoretical assertion. Therefore, this article effectively explains the generation condition of a farmer cooperative economy organization and the internal mechanism of how it promotes the development of agricultural specialization. So this paper provides a strong theoretical and practical evidence for the development of a farmer cooperative economy organization and agricultural specialization.

Keywords: farmer cooperative economy organization; division of labour; agricultural specialization; inframarginal analysis

Published: March 31, 2012  Show citation