Why Is the Development of Chinese Farmers' Cooperatives So Distinctive

A cooperative is a form of organization that exists within a certain organizational environment and possesses certain qualitative specifications; therefore, the distinctiveness of the development of Chinese farmers' cooperatives necessarily arises from the real constraints of the environment in which they operate.

The first is "structural embeddedness" based on the heterogeneity of agricultural production and operation entities. In today's China, the situation of farmer differentiation largely determines the heterogeneity of rural property rights entities, and this heterogeneity of property rights entities profoundly influences member motivations, property rights structures, governance structures, and even cultural orientations in the emergence and development of cooperatives. In other words, compared with Western developed countries, China's farmers' cooperatives exhibit pronounced member heterogeneity in their development. The original intent of a cooperative is to respond to external vertical integration through horizontal integration among members, but China's cooperatives are different: members are not a community of homogeneous interests, and it is quite likely that while jointly responding to external market competition, some form of buying and selling relationship also forms internally, that is, some members earn money from other members.

The second is "market embeddedness" based on the situation of agricultural product supply chain management. Since the 1980s, cooperatives have faced a trend of agricultural vertical integration and supply chain management characterized mainly by vertical coordination. China's agricultural economic development path, which differs from the usual path of European and American countries (first cooperativization/horizontal integration, then industrialization/vertical integration) in that it first industrialized (vertical integration) and then cooperativized (horizontal integration), necessarily gives rise to the distinctiveness of the goals, methods, and trajectories of the emergence and development of China's specialized farmers' cooperatives. This dilemma of market embeddedness also forces China's farmers' cooperatives to promptly and profoundly reform and innovate in strategy, organization, and business, among other aspects, in order to adapt to environmental changes. This means that: the organizational focus of cooperatives will necessarily shift increasingly toward the market and the cooperatives' own development; the operating strategy of cooperatives will necessarily move from being inward-looking toward openness, toward and into the supply chain; and cooperatives will necessarily participate in building internal and external interest coordination mechanisms with a new rationality. To a certain extent, vertical integration within a cooperative is a response to external vertical integration.

⟦NL> The third is "institutional embeddedness" based on China's social and political structure. In recent years, governments at all levels have placed increasingly heavy expectations on the development of farmers' cooperatives and have exerted considerable influence, which both helps promote the rapid development of cooperatives and also easily makes cooperatives strain to carry certain economic or social functions of the government. In fact, many local governments emphasize more the cooperatives' driving effect on members and non-members, while paying insufficient attention to supervising the standardization of cooperative operations. This explains why many leading enterprises participate in cooperative operations, because they all follow the policies. To a certain extent, government departments do not cater to leading enterprises; rather, they induce leading enterprises. It can thus be seen that the core issue in the future development of China's farmers' cooperatives will largely be transformed into the question of how to construct a reasonable balance between cooperative autonomy and government regulation.

The last is "village community embeddedness" based on village community structure and local culture. China's farmers' cooperatives have been rooted in rural grassroots society from the very beginning. However, in the traditional values and cultural norms of rural China, there seems to be a relative lack of the kind of cultural resources under market mechanisms that often require people to take equal relations and generalized trust as the greatest "moral guarantee." Moreover, the cooperativization movement of the 1950s and 1960s seems to have constituted, to a greater extent, some rather negative social memories. What is more, under the current circumstances in which rural communities, grassroots organizations, and their collective land resources are undergoing profound changes, how cooperatives and community organizations construct a reasonable interactive relationship, and whether the communitization of cooperatives strengthens or weakens their qualitative character, is all the more one of the basic backgrounds worthy of attention in the development of farmers' cooperatives.

All of this undoubtedly means that the development opportunities for China's farmers' cooperatives are far more severe, the constraints they face are far more complex, cooperative entrepreneurs are far scarcer, member endowments are far more uneven, and government intervention is far more frequent, which further leads to the distinctiveness of China's farmers' cooperatives compared with foreign cooperatives. If China's farmers' cooperatives are viewed within this framework of multiple embeddedness, the deeper the degree of embeddedness of a cooperative, the less it resembles a traditional, ideal, or standard cooperative. In this sense, the development of Chinese farmers' cooperatives is necessarily beyond the classical model, reflects Chinese characteristics, and embodies the features of the times.