How Cooperatives Can Follow a Development Path with Chinese Characteristics

In recent years, China's farmer cooperatives have flourished, and the situation is very encouraging. The broad masses of rural cadres and people, in studying and exploring how to develop cooperatives well and quickly, have created much valuable experience. Looking back on the history of farmer cooperative development since reform and opening up, we deeply feel that for cooperatives to win the support of the broad masses of farmers and achieve sustainable development, they must persist in taking the path of common prosperity, the path of modern agriculture, the path of green and organic production, and the path of civility and harmony. This is precisely the path of cooperative development with Chinese characteristics.

I. Take the path of common prosperity and uphold the socialist orientation

The report of the 18th National Congress of the Communist Party of China pointed out that “common prosperity is the fundamental principle of socialism with Chinese characteristics.” Only taking the path of common prosperity is socialism; the polarization in which a minority is wealthy and the majority is poor is not socialism. At present, amid the great tide of urbanization in China's rural areas, large numbers of farmers have gone to work in the cities, and those left behind are mostly the elderly, women, and children; in some areas land lies waste and villages are deserted. Faced with a complex market economy, how can farmers, each household on its own, escape their difficulties and achieve common prosperity? The establishment of cooperatives has pointed out a path of hope for them. Article 3 of the Law of the People's Republic of China on Specialized Farmer Cooperatives (hereinafter referred to as the Specialized Cooperative Law) clearly stipulates that “taking service to members as the purpose and seeking the common interests of all members” is a principle that specialized farmer cooperatives should follow. Practice has proven that in recent years, by giving play to their own advantages, relying on themselves, and working hard, cooperatives have made notable achievements in seeking the common interests of all members. While politically safeguarding members' principal position, they have also become an important channel for farmers to increase income and become prosperous economically. In many farmer cooperatives, the income of participating farmer households is more than 20% higher than that of other farmers, and in some cases even higher.

To achieve the goal of common prosperity, cooperatives need to handle the following relationships well. First, they must handle the relationship between cooperative members and capable large households and leading enterprises. While ensuring the principal position of the broad masses of farmer members and fully giving play to their role as masters, it is also necessary to mobilize the enthusiasm of capable large households and leading enterprises so that they contribute ideas and efforts to running the cooperative well. To this end, it is necessary both to respect the enthusiasm of the broad masses of farmers to join cooperatives and lower the threshold for joining, ensuring that farmer members account for at least 80% of the total membership of the cooperative, and to ensure that enterprises, public institutions, or social organizations occupy a certain proportion in accordance with regulations; both to ensure the basic voting right of one member, one vote in the cooperative, and to ensure the additional voting rights enjoyed by members with larger capital contributions or larger transaction volume (amount) with the cooperative, provided that the total number of votes does not exceed 20% of the total number of basic voting rights; both to ensure that the distributable surplus, after making up losses and setting aside reserve funds, is returned to members in proportion to each member's transaction volume (amount) with the cooperative, with that proportion not lower than 60% of the surplus, and to ensure that the remaining part after the return is distributed to members in proportion to the capital contributions and reserve fund shares recorded in the member's account, as well as the shares formed by property from direct state financial subsidies and donations from others received by the cooperative that are evenly quantified to members. Second, they must handle the relationship among the members' (representatives') assembly, the board of directors, and the board of supervisors. It is necessary to ensure the implementation of the members' assembly as the organ of power; matters concerning the vital interests of members and major matters stipulated in the Specialized Cooperative Law must be decided by the members' assembly. The members' assembly must not become a voting machine manipulated by a small number of people. At the same time, it is necessary to fully give play to the roles of the board of directors and the board of supervisors, handle well the relationship among decision-making, execution, and supervision, and ensure that the cooperative operates soundly, without the phenomenon of one dominant shareholder or a small number of people calling the shots. Third, they must handle the relationship between actively generating income and making profits in external business operations and wholeheartedly serving members internally. Cooperatives must both actively carry out external business, strive to increase income, and lay an economic foundation for common prosperity. They must also persist in implementing the spirit of “taking service to members as the purpose” as stipulated in the Specialized Cooperative Law, and provide low-cost, convenient services to the broad masses of farmer households in a timely and efficient manner. Only in this way can they mobilize to the greatest extent the enthusiasm of members to unite, cooperate, and venture into the market. Fourth, they must handle the relationship between government support and independent development. At present, cooperatives have encountered many difficulties in development, especially in funding, talent, and product sales. Cooperatives cannot overcome these difficulties without government support. However, government support can only play an effective role on the basis of the cooperative's independent development. Otherwise, no matter how good the government's support policies are, common prosperity cannot be achieved. To achieve common prosperity, there must also be an important prerequisite: the cooperative must have a leader and core members who are strongly dedicated, understand business, and know how to manage. They are the guarantee for farmers to develop and become prosperous. The vivid examples of a number of advanced models, such as the Quanming Aquatic Products Professional Cooperative led by Wu Quanming of Xiantao City, Hubei Province, the Zhengrong Farm Planting Professional Cooperative led by Liu Ruozheng of Jingshan County, Hubei Province, and the Dingsheng Fruit Industry Cooperative led by Chao Chengsong of Xinyi City, Jiangsu Province, powerfully prove this point.

II. Take the path of modern agriculture and make cooperatives bigger and stronger

As the saying goes, when the big river has no water, the small river runs dry; when the big river has water, the small river is full. For cooperatives to enable farmers to achieve common prosperity, they must first make themselves bigger and stronger. Developing modern agriculture is an important way for cooperatives to become bigger and stronger.

Modern agriculture needs cooperatives, and the growth and expansion of cooperatives also need modern agriculture. The organizational form of cooperatives overcomes the drawbacks of decentralized operation under the household contract responsibility system. By giving play to the advantage of “unified” management, they integrate resource factors such as land, labor, capital, and science and technology, providing good environmental conditions for the development of modern agriculture. At the same time, the development of modern agriculture also promotes cooperatives in quickly achieving scale, industrialization, and intensification, and accelerates the realization of farmers' income growth and the development and expansion of the collective economy. In developing modern agriculture, information is the guide, science and technology are the driving force, management is the key, and investment is the guarantee. Under strong government support, cooperatives must arm themselves with the information concepts of modern agriculture, enrich themselves with modern scientific and technological talent and new-type professional farmers, improve themselves with modern business management methods, equip themselves with modern material and technical means, and continuously enhance their capacity for self-development. Hubei Chunhui Group is a very good example. Under the leadership of Chairman Tan Lunwei, the group established four cooperatives of three types: land shares, agricultural machinery specialization, and production management, and actively developed modern agriculture. By building its own academy of agricultural sciences, inviting expert guidance, and introducing advanced science and technology, they did a good job in management such as seed selection, seedling raising, fertilization, and pest and disease control, took the lead in achieving scientification, and raised the scientific and technological content of agriculture and the land output rate; by carrying out land transfer to do a good job in basic farmland construction while increasing capital investment, they took the lead in achieving agricultural mechanization; by developing agricultural product processing, expanding sales, and broadening income-increasing channels, they increased the income of the collective and individual farmers, achieving a win-win for the enterprise and the cooperative, and their product sales market rapidly expanded to dozens of large and medium-sized cities inside and outside the province.