How cooperatives can explore the establishment of sound operating mechanisms

Recently, I led a team to conduct a special study at the Funong Vegetable Cooperative, a liaison point in Wenjiang District, Chengdu City, Sichuan Province, and, in connection with the issue of developing new types of agricultural operating entities, went to Pujiang County of Chengdu City and Qingshen County of Meishan City, as well as Caidian District of Wuhan City and Daye City of Huangshi City, Hubei Province, to gain an on-the-ground understanding of family farms, farmers' cooperatives, and industrial and commercial capital entering agriculture. Overall, new types of agricultural operating entities in these two provinces are developing rapidly, showing diverse characteristics in operating mechanisms and profit distribution, and they have played an important role in addressing the question of who will farm the land, ensuring the supply of commercial agricultural products, improving agricultural operating efficiency, and increasing farmers' incomes.

I. New types of agricultural operating entities need sound operating mechanisms

(1) The Funong Vegetable Cooperative in Wenjiang District, which integrates production and consumption cooperation

⟦NL> The Funong Vegetable Cooperative was established in August 2007 and is mainly engaged in the cultivation and sale of vegetables and rice. The biggest feature of this cooperative is that it not only organizes farmers together in the production stage, but also develops urban residents into members in the consumption stage, achieving a link between production and consumption. After 7 years of effort, the cooperative's operating area increased from 380 mu to 3,400 mu, member income rose from an average of 21,000 yuan per household to 68,000 yuan, the number of farmers joining the cooperative reached 180 households, and urban resident members served exceeded 1,500 households.

1. In production, it adopts a method combining unified and independent operations. Chairman Zhang Shaofa said that the cooperative's production methods include two major parts: unified operation and independent operation. The unified operation covers 120 mu of vegetables, with technicians and workers hired for management; members independently operate 3,280 mu, with the cooperative providing services of "unified supply of agricultural materials, unified allocation of agricultural machinery, unified prevention and control of pests and diseases, unified inspection of products, and unified brand building." This mode of production is conducive both to the core base playing a demonstrative and display role and to implementing unified services on the basis of mobilizing members' enthusiasm for production, thereby achieving large-scale operation.

2. In sales, member ordering is the main method. "No matter how well you grow it, if you can't sell it, it doesn't bring in money." Chairman Zhang Shaofa said that in the past two years they had thought of many ways to improve sales, developing urban residents into members, signing delivery contracts with members and collecting payment in advance, and organizing production according to orders. Monthly contract amounts range from 92 yuan to 580 yuan, with members free to choose. Developing members is mainly handled by 4 university graduates, who are paid through a method combining base salary and equity incentives. This method of signing orders before production has basically achieved production determined by sales and supply guaranteed by production, established a stable production-sales relationship between production cooperative members and urban residents served, and promoted the standardized and stable operation of the cooperative.

3. In profit distribution, all parties are taken into account. In 2013, the cooperative made a total profit of 500,000 yuan. With the consent of member representatives, 30% was used as development funds for publicity; 30% was used as customer feedback funds to rebate customers; 30% was used as bonuses for heads of delivery areas; and 10% was returned to members, who unanimously agreed to convert it into accumulated funds for now. This distribution method helps the cooperative stabilize its organizational members and attract new members, forming a sales-oriented operating mechanism.

(2) The operating mechanisms and roles of new types of agricultural operating entities

Not only is the Funong Vegetable Cooperative striving to develop an operating mechanism suited to its own characteristics, but the other new types of agricultural operating entities we studied are also constantly exploring sound operating methods. Pujiang County is a base county where Lenovo Group entered kiwifruit development and operation. Lenovo's entry into agriculture not only involved its own set of practices, but also played a demonstrative and leading role in the development of local new types of operating entities. The Jin'e Kiwifruit Cooperative guided small-scale farmer members to form "large households" to connect with Lenovo Joyvio Company, and guided and supervised them in producing according to the company's requirements, achieving a link between dispersed farmers and the unified market. The Tianyuan Sunshine Family Farm in Wenjiang District adopted a method combining land transfer, independent operation, and hired labor, planting 120 mu of vegetables, some sold directly to nearby residents and some sold to the local wholesale market, with net income reaching 320,000 yuan in 2013.

For the development of new types of agricultural operating entities, having a sound operating mechanism is very important. In terms of property rights, asset ownership relationships should be clarified to achieve clear attribution and well-defined rights and responsibilities; asset linkages should be tightened to form a closely connected community of interests. In production, various resource factors such as land, capital, and talent should be integrated to reflect the openness and growth potential of agricultural production; advanced production technologies should be applied on the basis of appropriate scale operation to improve the utilization efficiency of various resources and agricultural production efficiency. In operation and management, operating methods suited to the characteristics of each product and production stage should be adopted to effectively organize agricultural production; decision-making methods that comply with laws and regulations and are recognized by members should be adopted according to one's own characteristics to make efficient and scientific decisions. In sales, the orientation should be to meet market demand and provide commercial agricultural products or services; modern marketing concepts and methods should be used to expand sales channels. In profit distribution, the relationship between distribution and accumulation and between long-term and short-term goals should be considered as a whole to determine the total amount of profit distribution; the contribution of various resource factors to profits should be reasonably assessed, and the interests of all parties should be taken into account in distribution to mobilize and protect the enthusiasm of all parties.

A sound operating mechanism helps new types of agricultural operating entities play an important role in the development of the agricultural and rural economy: first, ensuring the supply of commercial agricultural products; second, increasing farmers' incomes; third, improving the competitiveness of the agricultural industry; and fourth, solving the problem of who will farm the land.

II. The government should act effectively to cultivate new types of agricultural operating entities

During the study in Sichuan and Hubei provinces, cadres and the public generally reported that to promote the healthy development of new types of agricultural operating entities, it is necessary to address in a targeted way the difficulties and problems they face in development. First, production facilities are difficult to build. Guo Changlin, owner of the Changlin Family Farm in Pujiang County, said he hoped to have a cold storage facility so that after picking kiwifruit he could store it for a period and sell it off-season for a better price. But the investment is too large and land use still has to be applied for; now there is no way but to rent someone else's cold storage, and sometimes it cannot even be rented. Second, loans are difficult to obtain. Zhang Shaofa, chairman of the Funong Vegetable Cooperative, reported that it is still very difficult for cooperative products to enter urban communities, and property management charges fees, as low as 150 yuan a day and as high as 300 yuan a day. "We want to open a direct-sale store, both to sell vegetables and as an image display, and also to discuss business; in total it would take 400,000 yuan. It is impossible to get a loan from the bank, so I can only borrow from relatives and friends." Third, development is not standardized enough. A responsible comrade of the Qingshen County Agriculture Bureau reported that although the number of local cooperatives is not small, many cooperatives are no different from self-employed households, still each going its own way, and some simply sell agricultural materials. Grassroots cadres also reported problems such as cooperatives simultaneously registering as family farms and family farms hiring too much labor. Fourth, guidance and service capacity is not strong. A comrade from the Sichuan Provincial Department of Agriculture said that at present most townships are in a "three withouts" state regarding agricultural economic management institutions, positions, and personnel; the weak strength of the grassroots agricultural economic management team directly affects the carrying out of work, and "some townships cannot even compile statistics," making it impossible to understand the basic situation of cooperative development. Hubei Province has similar conditions. In response to the above problems, both Sichuan and Hubei took various measures and worked hard to explore ways to promote the standardized development of cooperatives.

(1) Cultivate advantageous industries. By intensifying work in selecting leading industries, supervising quality and safety, and maintaining regional brands, complete industrial chains are built to create a favorable environment for the development of new types of agricultural operating entities. First, promote applicable technologies. The secretary of the Pujiang County Party Committee introduced that over the past 10 years the county has taken kiwifruit as an advantageous industry and cooperated with the Wuhan Botanical Garden of the Chinese Academy of Sciences and others to develop new varieties and issue cultivation technical regulations, providing support for industrial development. Caidian District, Daye City, and other places organized family farm owners and cooperative leaders to participate in production technology training to improve production skills. Second, strengthen quality and safety supervision and services. Pujiang County established a county-township-village three-level supervision and service system, with a service center at the county level, comprehensive service stations in townships, and technical and material service rooms and comprehensive service rooms in every village, conducting supervision and services across all stages from kiwifruit production technology and input management to harvesting. Third, build sales platforms. Meishan City repeatedly organized cooperatives to participate in exhibition and promotion fairs and reached procurement agreements worth 50 million yuan with distributors, communities, and others. Pujiang County cultivated sales leaders and encouraged Lenovo Joyvio Kiwifruit Planting Company to guarantee sales channels for family farms, cooperatives, and ordinary farmers by developing chain planting and other methods. Fourth, maintain regional public brands. Pujiang County applied for the Pujiang kiwifruit geographical indication and held international forums and other activities to publicize and promote it. A responsible comrade of Pujiang County introduced that the county implemented grid-based management for kiwifruit transportation, set up checkpoints, and conducted patrols to inspect whether kiwifruit using the geographical indication had origin certificates and picking certificates, and seized those with incomplete or forged documents in order to maintain the regional brand.