How can farmers' disadvantaged position in the financial system be changed?

Recently, some media outlets reported that certain rural specialized cooperatives have turned into counterfeit banks, swindling farmers out of their hard-earned money. Rural specialized cooperatives are a new type of rural economic entity strongly supported by the state. Why have these problems emerged in the rural financial sector? This is related both to the fact that China's rural specialized cooperatives are still at a primary stage and to the shortage of professional cooperative talent, the lack of a supervisory system, and weak institutional design, among other factors.

From the perspective of the entry threshold for rural specialized cooperatives, it is still relatively low. According to the Law on Farmers' Professional Cooperatives, to establish a rural specialized cooperative, it is only necessary to have five or more qualifying members and submit an application to the administrative department for industry and commerce. The business license for a rural specialized cooperative is issued by the industry and commerce department, but the law does not specify the regulatory functions of that department, and the vast majority of rural specialized cooperatives are not required to undergo annual inspection and review. The leaders of cooperatives are often the economic leaders of rural areas, and farmers choosing to hand over their funds to them means trusting in their abilities. However, if funds roll over too quickly and oversight is lacking, whether the organizers of a cooperative can still resist temptation in the face of enormous profit incentives is an unknown; there are also cases where some organizers lose the funds due to failed investments or production mistakes. Yet when some rural specialized cooperatives turn into counterfeit banks, what we should reflect on is not whether cooperatives should exist, but how to help rural specialized cooperatives establish a better development logic, how institutional design can be more complete, how the supervisory system can be more effective, and how professional production information can be more widely available.

Driven by multiple No. 1 Central Documents, a consensus on developing farmers' cooperatives has already taken shape. As representatives of farming households, farmers' cooperatives are conducive to centralized operations, better responding to market demand, and increasing income. At the same time, the government can implement relevant policies through farmers' cooperatives and strengthen macro-control over agriculture. The mechanisms of farmers' cooperatives are relatively flexible, can address the disadvantaged position caused by the fragmentation of farmers' production, and help make agricultural production more scientific, targeted and forward-looking.

Starting from the institutional development of cooperatives, we can fully draw on some relatively complete and mature practices from home and abroad. From the history of cooperatives, it is generally believed that the first cooperative in the modern sense was the Rochdale Equitable Pioneers Society established in 1844 in the United Kingdom. Its pioneers, proceeding from the actual social environment, created a set of principles for establishing and operating a cooperative suited to the requirements of a market economy, historically known as the "Rochdale Principles." These principles mainly consist of six points: first, voluntary pooling of shares and raising funds, distributing only a small amount of interest rather than dividends; second, equality among members and democratic management, with one person, one vote in elections regardless of the amount of shares; third, joining the cooperative is not affected by political or religious beliefs; fourth, buying and selling in cash at market parity prices, ensuring full weight and measure; fifth, sharing profits in proportion to purchase amounts; sixth, extracting 2.5% of the surplus as member education expenses. The reason these six points have always been upheld and have proven effective time and again is that they both fit the background of cooperatives and keep pace with market development. From the development of China's rural specialized cooperatives, there are too many newly founded cooperatives, and some effective cooperative experiences have not yet been borrowed and absorbed, which is related to a certain extent to the cultural literacy and skill literacy of farmers in China's rural specialized cooperatives. Therefore, it is very necessary to provide cooperative training to farmers.

For a long time, finance has been a weak link in rural development. Systems such as rural credit cooperatives once took root in rural areas, but the existence of the "siphon" phenomenon has led to the outflow of rural funds. How can farmers' disadvantaged position in the financial system be changed? This is not only a question of funds, but also a question of rural financial talent. Without farmer financial talent, it is difficult to carry out finance in rural areas. How can farmer financial talent be increased? In this regard, the Bangladesh rural bank, Grameen Bank, has provided some experience. Founded by Nobel laureate Yunus, this rural bank mainly serves the rural poor and has already formed an organizational form built on social pressure and joint liability. It is the largest, most efficient and most successfully operated microcredit financial institution in the world today. One of their characteristics is that poor rural women form five-person groups for mutual guarantee, and rural development is promoted by providing them with smaller loans. Practice has also proven that this both solves the funding difficulties of the rural poor and improves their cooperative literacy and financial literacy. Last December, JD Group cooperated with Grameen China to promote rural microcredit business, open up China's rural financial market, and test the waters for improving Chinese farmers' development capacity, which is also a meaningful exploration.

Rural areas need talent, cooperatives need encouragement, and rural finance needs innovative ideas. These are all difficult, but they must be done and must be boldly attempted; the road that should be taken must always be taken.