There are many contract forms for agricultural industrialization management: first, the market contract model. The company orders the required intermediate products from farmers in a one-to-one way; The relationship between companies and farmers is a complete market transaction. One is the factor contract model. Companies buy farmers' land and turn farmers into farm workers. There is also a "stock market system" model. Farmers buy shares in land, become shareholders of leading enterprises and participate in dividends and dividend distribution of the company. At present, there are many market models of "company+farmer", and the contract model of "company+farmer+base" discussed in this case is a contract development or organization form worthy of attention. This contracting mode is an independent choice and beneficial exploration to coordinate and stabilize the contract relationship between companies and farmers in agricultural industrialization, and then improve the degree of organization of farmers entering the market. Therefore, it has many economic connotations worth discussing and analyzing.
A, Safia company contract conditions.
Safia Company is located in Xizi Town, Ningcheng County, Inner Mongolia. Its predecessor is the Great Wall Industrial Corporation, which belongs to township enterprises. 1996, the company was transformed into today's Safia limited liability company through shareholding system reform, in which Xizi Town Government owns 0/5% of the shares of Safia Company. The company's main business is feed, duck breeding and deep processing. The company has duck factory, food processing factory, packaging factory, feed factory, breeding factory and so on. Safiya's integrated industrial chain of animal husbandry, production and processing is as follows:
Theoretically, the above industrial chain processes can have different organizational forms. One is to form a number of independent enterprises with close upstream and downstream relations, which are connected in the form of commodity contracts in the market through market transactions. The other is to internalize commodity contracts into factor contracts to form integrated enterprises. However, Safiya Company and farmers finally chose a special contractual arrangement between them, that is, the contractual arrangement of "company+farmers+base". The author calls it a "quasi-integration" contract. The reason for this is that the three links (4), (5) and (7) in the process of this industrial chain are not completed within the enterprise, but behind a combination agreement between the company and farmers, which is completed by farmers. This contractual arrangement concentrates the dual advantages of effective market incentives and administrative efficiency within the organization.
Sefia Company chose the contract of "company+farmer". On the one hand, due to the huge investment in raising ducks, enterprises can't bear it alone, and the local special geographical environment, this investment has strong specificity. The signing of the contract between the two parties can avoid the insufficient investment and investment risk caused by the "lock-in" problem, thus ensuring the continuity of aquaculture production. On the other hand, the local government hopes that leading enterprises will fully absorb idle labor and make full use of farmers' idle assets to drive local farmers to increase their income and become rich.
Xizi Town in Inner Mongolia has an agricultural population of 32,000, mainly producing corn. To develop aquaculture in such a remote mountainous area, the following conditions must be met: ① the choice of industry must conform to the local resource endowment; (2) Must have considerable primitive accumulation or be able to obtain necessary loans through credible collateral; (3) Being able to make use of local cheap labor to make industry develop into a common cause that the government is willing to support and farmers are eager to participate in; ④ The product should have a good market prospect and the input-output cycle should not be too long; ⑤ There should be stable technical support and efficient and stable institutional arrangements suitable for the development of agricultural industrialization, that is, contractual arrangements, so that all parties involved in the transaction can obtain sustainable cooperation (transaction) surplus.
According to the author's investigation in Xizi Town, all the above conditions can be met except ⑤, and they are quite stable. This paper will focus on the conditions, and then explain why Sefia Company and farmers first chose the institutional arrangement of "one-to-one piecework contract", and then how it evolved into a contract of "company+farmers+base".
Second, the initial contract and its incompleteness
Safia Company initially signed a piece-rate wage contract with local farmers because it has rich duckling production potential, but the actual production capacity of the company's aquaculture plant can't meet the market demand. Therefore, the company must rely on farmers to participate in breeding to solve the contradiction between the large local production capacity and the uncoordinated product structure. At the same time, by signing the purchase contract with farmers, it can also ensure the timely expansion of market share and improve the competitiveness of the company in similar enterprises. Another important reason is that the food the ducklings need is processed from the local main crop-corn; Duck manure happens to be a kind of natural pollution-free fertilizer, which can be recycled back to farmland. Therefore, Safia Company signed a contract with local farmers. This is not only of great significance to agricultural upgrading and farmers' income increase, but also has positive external effects on the ecological environment. The author calls this positive impact on the environment "environmental premium of transaction". It is this "premium" that makes the cooperation between Safia companies and agricultural products become an eco-agricultural industrialization project supported by the local government, and it also gives companies sufficient reasons to ask for loan support from the financial sector.
1997 65438+February, the duck breeding factory, feed factory and incubation factory of Safiya Company were successively completed and put into operation, and the original Ningcheng County Food Company acquired by merger was transformed into a standard finished duck processing line, and the production was fully started. Safiya Company (hereinafter referred to as Party A) signed the finished duck breeding contract with 34 farmers (hereinafter referred to as Party B) for the first time. Contract: ① The minimum unit for each household is 200. ② Party A shall provide ducklings and duck feed. The purchase price of ducklings and duck feed paid by Party B to Party A shall be determined by both parties through consultation. The price benchmark refers to the ex-factory price of a large aquaculture company in Beijing and shall not be higher than this price. (3) Party A provides farmers with a certain discount of strictly formulated grain (3 kg grain for each duckling in the growth period). ④ Party A provides technical guidance free of charge.
The contract also stipulates that Party A must purchase the finished duck at the price agreed by both parties and shall not refuse it for any reason. Party B shall carry out breeding according to the technical requirements of Party A, and Party A has the responsibility and obligation to solve all kinds of technical problems in Party B's breeding. The purchase price of the finished ducks can ensure that each duck can get the net profit of 2.5 yuan after deducting the breeding cost (excluding the labor cost and the "rent" of the family assets of the farmers).
At first, farmers had doubts about whether the company could keep its promise to buy finished ducks, and their enthusiasm for signing the contract was not high. Later, the Xizi town government came forward to guarantee that if the company defaulted, the town government would exempt farmers from all kinds of taxes and withholding (the corresponding compensation would be recovered from the company by the government). The timely intervention of the government reassured some farmers, but most farmers are still waiting to see. Due to the short breeding cycle of ducks, the growth period from ducklings to adults is about 50 days. A few months after the implementation of the contract, the farmers got practical benefits, and good expectations gave the wait-and-see farmers great motivation to participate in raising ducks. Within half a year, more than 200 farmers signed contracts with Safia Company, and the largest scale of single-family farming reached 1500 people. By the end of 1998, all farmers had raised more than 700,000 heads (contracted number).
With the expansion of aquaculture scale, the problem of accidental death of ducks began to appear. Because the original contract did not define the loss of duck death in detail, the problem of risk allocation between the company and the farmers became prominent. Compared with the company, the ability of farmers to take unexpected risks is weak. If the company can't properly compensate the abnormal death loss of ducks, the motivation of farmers to sign and renew contracts will be reduced. The company takes advantage of technology and information to provide technical guidance and food supply for agricultural products, which belongs to technical support behavior and objectively has the function of reducing production risks by using biotechnology. As long as farmers breed according to technical regulations, the incidence of ducklings is not large. The author calls this the minimum technical insurance, which can reduce the natural mortality of ducklings. However, technical insurance is not equal to legal insurance. If the terms of the contract can't clearly stipulate the losses and responsibilities caused by the death of the duckling, then the contract lacks the ability to adjust the unexpected risks, which will change the expectations of both parties to the transaction on the prospects of cooperation, and ultimately affect the number of contracts signed by both parties and the stability of the contractual relationship. The omission of the above-mentioned accidental risk clauses will lead to disputes between the two parties to the transaction. This also shows that if the contract does not have the "insurance function" recognized by law, it will lead to an increase in transaction costs. For a complete contract, only the minimum technical terms and the technical insurance implied in the terms are far from enough. Production risk, the consequences of market risk and corresponding measures, as well as the resulting responsibility and rights sharing, must be stipulated in the contract, and the contract is always incomplete.
Two events after the first round of signing led to the inherent requirement of re-signing. The first incident was that about seven or eight contracted farmers died of ducklings for unknown reasons during the breeding process. These farmers claim damages on the grounds that the ducklings provided by Safia Company are sick. However, it is extremely expensive to truly and objectively identify the cause of death of ducks and define the responsibility. Considering the affordability of individual farmers, and in order to protect the enthusiasm of farmers to raise ducks, Safia Company needs to modify the original contracts with all farmers. The second incident occurred at the beginning of 1999, because the market price of finished ducks became favorable to farmers. The prices of agricultural products and aquaculture products fluctuate greatly in the market, which is also an important reason why many agricultural products are traded in futures. By agreeing on futures prices, the price fluctuations of agricultural products and aquaculture products can be stabilized to a considerable extent. The farmers who signed the contract found that the market price was higher than the signing price, so they sold the finished duck to the market on the grounds that "improper feeding led to death". Safia Company suffered huge losses as a result. In order to change this opportunistic behavior of unilateral breach of contract, the company needs to revise the contract with farmers again.
Three. Contract modification and special investment
The local government has always wanted this kind of "company+farmer"! Our industrialized operation can bring benefits to more farmers, so we have been asking the company to expand the number of farmers and let more remote farmers participate in farming and trading. But the company has its own considerations: first, if the farmers are too scattered, it will increase the difficulty of the company in acquisition (long distance) and technical services (many on-site guidance objects), so the transaction cost will increase. Second, the original contracted farmers have accumulated rich experience, and expanding the number of farmers by them will save a lot of learning costs and coordination costs than simply increasing the number of farmers (in addition, a lot of tacit understanding and "relationship capital" have been formed and created between the company and farmers). However, the attitude towards the government cannot be ignored by the company. As a result of bargaining, the company made a compromise on expanding the number of farmers and increasing the number of farmers. In order to encourage more farmers to expand the number of aquaculture, the local government and companies have made efforts to make full use of the relevant policies of the western development and won a long-term agricultural poverty alleviation loan of 4 million yuan. After research by the company and approval by the relevant departments, it is decided to use the loan for the reconstruction of duck farmers' duck houses. Specific practices are as follows:
If the number of farmers is between 500- 1000, the enterprise will give some compensation for the transformation of duck houses; If the number of farmers exceeds 1500, the company will provide loans for farmers to build duck houses by way of mortgage guarantee.
The company adopts the method of "one household, one discussion" for super-large duck farmers. The company and farmers weigh the investment amount, investment risk and the "risk-free profit" obtained by each finished duck. In principle, the company guarantees that the total profit of farmers will increase with the expansion of scale (after deducting investment risks). Therefore, the two parties signed the following two contracts: (a) Party A bears all investment risks, and according to the time limit agreed by both parties, Party B adjusts the "risk-free profit" 2.5 yuan of each duck to 0.5- 1 yuan (depending on the investment scale). After the specified period, renegotiate the "risk-free profit" of each duck (equivalent to the mortgage loan with preferential interest rate). (b) Party B voluntarily undertakes investment risks. According to the time limit agreed by both parties, Party A will increase Party B's "risk-free profit" by 0.05-0.2 yuan per duck (depending on the investment scale). After the specified period, renegotiate the "risk-free profit" of each duck (equivalent to the investment risk cost compensation).
It is a special investment to transform duck houses with poverty alleviation loans. For farmers with a large number of farming, special investment can not only expand the scale of farming, but also obtain "risk-free profits"; For the company, providing mortgage guarantee for agricultural products loans will not only help stabilize the trading contract (farmers will suffer losses when they withdraw from the trade), but also increase production and create greater surplus. Contract revision redistributes risks and profits; The special investment has trained large-scale farmers, which in turn provides material support for the long-term cooperation between the company and farmers.
After the contract was revised, the total amount of farmers' farming gradually expanded, but the number of farmers decreased relatively, and agricultural products tended to be relatively concentrated. By the end of June, 2000, 5438+February, the total amount of aquaculture in the whole year had reached nearly 3 million. See table 1 for the distribution pattern of aquaculture.
Four, two-step contract: the company "locked" farmers.
The necessity of division of labor and cooperation between the company and the farmers stems from the technical separability between the duck raising process and the product generation process. At the same time, due to the characteristics of duck breeding, production and processing, the assets owned by both parties are highly complementary. If there is a problem with the contractual constraints (or one or both parties breach the contract), for example, the company completely relies on market acquisition to obtain meat ducks (intermediate inputs), or the farmers completely rely on the instant market to sell meat ducks for income, the company's special equipment and farmers' special assets may suffer losses due to the other party's withdrawal from the transaction. The unstable expectations of both parties will lead to more uncertainties and market risks. This requires both parties to sign a further contract to restrain each other's behavior. Asset specificity enhances the "bilateral interdependence" between the two parties to the transaction and complicates the contractual relationship. This dependence will lead to contract risk under the conditions of incomplete contract and opportunism. The second step of Safia Company's contract is to provide "contract guarantee" to reduce risks. The two parties in a given transaction have complementary assets, and the two-step contract between the company and the farmer has the characteristics of stability and durability.
In order to stabilize the contract and reduce the risk value, the company adopts the contract clause of "cost plus profit" to regulate and restrain farmers' breach of contract. The company has revised some terms: the company has substantially increased (about 2 times) the price of selling ducklings and agricultural products feed, and the price of recycled finished ducks is determined on the basis of "cost plus profit", but it is necessary to ensure that each finished duck can get a net profit of 2.5-2.6 yuan after deducting the actual purchasing cost from the company. This clause makes farmers have no price advantage when selling finished ducks to the market, but it also makes farmers get enough benefits while abiding by the contract. These new clauses effectively put an end to the phenomenon of "leakage" of finished ducks caused by farmers' breach of contract, and resolved the risks brought to the company by market price fluctuations. The revised contract not only protects the interests of the company, but also increases the income of farmers, and the scale of farmers' breeding has also expanded.
In terms of the contract, the company intends to raise the price of ducklings and their feed for farmers, so that the input cost of farmers is higher than the price cost formed by the market. When farmers fulfill the contract and are acquired by the company according to the contract, the company compensates the extra cost of farmers by paying the purchase price higher than the market, so that they can get higher income than reselling meat ducks to other vendors. In this way, the company ensures the enthusiasm of farmers to raise ducks and fulfill the contract.
At the same time, the two-step contract also regulates the technology, feed, production cycle and product quality of meat ducks produced by farmers, and also stipulates the responsibility clauses such as the company teaching production technology to farmers, helping farmers to obtain necessary loans and purchasing all meat ducks provided by farmers. The contract arrangement strengthened the company's technical and quality management of the whole process of producing meat ducks by farmers. Although the "piece-by-piece contract" is still adopted in the transaction relationship and profit sharing, the stability of the contract is greatly enhanced through special investment, investment guarantee and "cost plus profit". However, with the continuous expansion of market capacity, if Sefiya Company wants to further improve its meat duck breeding and processing capacity, the original decentralized contracting model can no longer meet this demand (see Table 3). At the same time, relying on the natural distribution of meat ducks in scattered villages will also increase management costs, organization costs and transportation costs.
The two-step contract partially solves the stability problem of the contract, but it does not fundamentally solve the constraints of the decentralized layout of farmers and the long industrial process chain on capacity expansion. At the same time, the company mainly relies on the continuous supplement and modification of the initial contract terms in terms of stabilizing transactions and reducing risks. The further development of agricultural industrialization needs to reconstruct the production structure and its corresponding contract structure. When the efficiency of centralized production (farming) is obviously higher than that of scattered farming, the "one-to-one piece-rate contract" between the company and scattered farmers will be replaced by a more integrated piece-rate contract. A new contract form-"base contract" came into being, which integrated the breeding process and other production processes.
Verb (abbreviation of verb) Adjustment of production structure and foundation
The mode from "company+farmer" to "company+farmer+base" is a new exploration of agricultural industrialization management, and it is also the improvement and promotion of the original production structure and contracting structure of Safiya Company after the second contracting. Duck farmers are concentrated in a barren beach (mostly saline-alkali land) or hill with 20 households as a unit, and build houses in accordance with the standard of enclosure and quantity stipulated in the contract for large-scale breeding. Each base should build 20 simple duck houses, and each household should have one duck house. Each duck house is about 230 square meters, and 5 to 8 ducks can be raised in one square meter. Among them, a living room and reception room are specially designed to meet the needs of duck farmers, and the rest are duck houses. Each duck farmer can raise about 1300 ducks in one round, and can raise 5-8 rounds a year. The cost of building a house is about 30,000 yuan, including 26,000 yuan for duck houses and 4,000 yuan for captive facilities. If 1 meat duck income 1.6 yuan, an ordinary duck farmer can get a net income of about 1.2 million yuan a year.
If the contract of the base is not adopted, duck farmers will only use the remaining space in front of and behind the house to breed meat ducks, and the number of breeding will be limited by the remaining housing area. For the company, to expand the scale of production, it is necessary to increase the amount of aquaculture with its own investment, which requires considerable investment. The cost of building a duck house is about 30,000 yuan, and the cost of building 100 duck house is 3 million yuan. To expand the breeding scale of meat ducks from 3 million in 200/kloc-0 to 4.5 million in 2002, more than 80 duck houses (each duck house breeds 8,500 ducks a year) need to be added, with a total investment of about 6 million yuan (see Table 4), and this investment is the company's net investment. If the training cost saved by duck farmers learning from each other and the organizational cost saved by centralized management are included, the contractual arrangement of "company+farmers+base" can bring efficiency improvement and cost savings to both parties. Because this substitution integrates production (breeding), management, technical guidance, transportation and duck manure treatment, it brings scale benefits, not only saves rural land, but also optimizes farmers' living environment (the contract stipulates that the base must be about 2 kilometers away from the village 1-2, because duck manure will attract mosquitoes and flies, spread diseases, worsen farmers' quality of life, and make farmers unable to enjoy fresh air and clean environment).
For farmers, there are three ways to build duck houses: first, farmers' own reproduction accumulation; The second is to borrow money from relatives and friends; The third is to obtain low-interest loans from financial institutions through the guarantee of leading enterprises and the qualification examination of credit institutions. The bank's trust in farmers mainly depends on three factors: the good reputation formed by the industrial prospects of leading enterprises; Local government's policy support for leading enterprises; Comparative advantages of meat duck breeding compared with agriculture (see Table 4). Judging from the situation of Safia companies, farmers who get loans through credit institutions account for the vast majority.
The formation of duck breeding base promoted the industrial structure of Safia Company, expanded the production scale and further changed the contract structure. From the development practice of Sefiya model, the basic contract form is not only chosen by both parties to the transaction, but also supported by local governments. Its economic significance also lies in strengthening the complementarity and risk sharing of investment between companies and farmers. Farmers invest in building duck houses, and the company invests in improving the processing capacity of feed and meat ducks. The more the two sides invest, the greater the complementarity of their respective assets, the stronger the industrial dependence and the stability of trading contracts, and the more obvious the trend of choosing integrated contracts.
Source of information: agricultural economic guide
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