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Research on Performance Evaluation of Farmers' Specialized Cooperatives
Selected from Hilly Area, Sichuan Province, China1,
2
Based on Survey of Thirteen Farmers Specialized Cooperatives
Feng Changjian
Master, College of Economics and Management,
Sichuan Agricultural University, Chengdu, China (611130).
Fu Xinhong
Rural Development Research Center of Sichuan Province,
Professor, College of Economics and Management,
Sichuan Agricultural University, Chengdu, China.(611130).
Lv Chenzhong
Master, College of Economics and Management
Sichuan Agricultural University, Chengdu, China (611130)
Abstract
The performance evaluation on farmers' specialized cooperatives is one of the hot spot in research of
the agricultural economy in recent years. This article is based on the survey of thirteen cooperativesin the hilly region of Sichuan province. According to the performance appraisal system of Farmers'
Specialized Cooperatives, the standard coefficient method is used to analyse the 16 performance
indexs of the cooperatives. The results show that although the number of cooperatives increases
quickly in Sichuan province, the cooperative comprehensive performance of the hilly region is nothigh. Therefor, this article analyse the main reasons, provide some suggestions and hope it can help
the development of cooperatives in the hilly region of sichuan province, China.
Key Words: Farmers' specialized cooperatives, index of Performance evaluation , Standard
coefficient method, Hilly area in sichuan province, China
1. Introduction
Since the law on Farmers' Specialized Cooperatives has been issued and implemented in 2007,
Farmers' Specialized Cooperatives development is rapid in china. by the end of 2010, the number ofcooperatives in whole nation is more than 3.5 million, the growth exceeding 40% compared with the
end of 2009, increase of 10,000 per month; The farmers joined in cooperatives has about 28 million,
which accounts for about 10% of the national farmers[1]
. Farmers' Specialized Cooperatives involvesrural each industry like planting, breeding and farm machinery, the business activities involved in
processing, storage and sale and other link. The cooperatives play an important role in building new
socialist countryside, developing modern agriculture, promoting farmers' income increase. However,
the present situation of Farmers' Specialized Cooperatives is not well, like the scale is small, theservices is narrow, the comprehensive strength is not strong and so on.
1 This article is sponsored by the philosophy and social science fund of sichuan province, "Study on Governance
Mechanism and Performance of Farmers' Specialized Cooperatives in Sichuan Province (SC09E010)", Fu Xinhong is
the corresponding author.2This article was also sponsored by Sichuan Education Department Project, "Study on the Impact of Social Capital of
the Core Members to the Development of Crop Farming Cooperatives in Southwest".
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Sichuan province as a big province of agriculture, with the background of balancing urban and rural
development, cooperatives are developed quickly. By August,2010, the numbers of Farmers'
Specialized Cooperatives is developed to 1,3000 in the whole province, having the members of 1.6million, driving the farmers of 4.6 million. At present, the whole province has the accumulative of
pollution-free agricultural production bases is 22.896 million acre, 730 products obtained the right
to use "green food", and 195 products gained organic food certification[2]. The hilly region is animportant agricultural production in sichuan province, though the size area occupys only the 18% of
complete province, the cultivated land area accounts for 57.6%; the total population accounts for
59.9%, of which the rural population accounted for 62.3%; GDP accounted for 43%[3].
No matterfrom the proportion of the population, cultivated land and the total economy, the hilly region plays a
very important position in economic development of the whole province. But in general,caused by
infrastructure is relatively backward, the utilization rate of the factors of production is low, the
farmer organization degree is not high and other restriction factors, the sichuan hilly area's economicdevelopment foundation are weak.
Therefore, analysis the performance of the Farmers' Specialized Cooperatives in hilly region of
Sichuan province, can help to find the existing problems of the cooperatives, promote thecooperative development, increases the farmers' income, improve the comprehensive strength of thecooperatives. At the same time, speeding up the hilly region's development of modern agriculture is
objective requirements that achieve the new span of Sichuan province's economy, speed up the
economic development in western, it's helpfull to promote the modernization of agticulture, improvethe competitiveness of the hilly area, balance urban and rural development, speed up the process of
integration of urban and rural areas.
2. Literature Review
By performance evaluation, means a comprehensive measure that is established in the further
advancement of the organization, with improving personal and organizational performance being abasic goal, as the basic index of the degree of organization functionality, the operational
effectiveness of organizational and satisfaction of the organization service object, play a role in
organizational operation effect and function (The research group of Zejiang province agriculturehall, 2008). Accordingly, FanYuan jiang (2011) identified performance evaluation of the Farmers'
Specialized Cooperatives with that, a comprehensive measure that is established in the further
advancement of the Farmers' Specialized Cooperatives, as the basic index of the operationaleffectiveness of the Farmers' Specialized Cooperatives, the functional degree of the organization ,
and the satisfaction of the cooperative members, play a role in the farmers' professional cooperative
operation effect and function.
In performance index system research, the research group of Zhejiang Province agriculture hall(2008), Xu Xuchu (2009, 2010) based on the performance evaluation system of Farmers'
Specialized Cooperatives with behavioral performance and productive performance, defined the fiveaspects of index in organization construction, operation activities, membership benefits,organization development and social impact, it's the most influential evaluation index system. Wang
Liping(2008), Zhao Jiarong (2010), thought the Farmers' Specialized Cooperatives as a enterprise of
membership community, it's performance evaluation in addition to economic performance and
social performance, still should include ecological performance. Dong Xiaobo (2010) discussed theinnovation of executives group impact on the business performance of the Farmers' Specialized
Cooperatives, considered between the cooperative innovation and the social and economic
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performance is the positive correlation relationship. Fan Yuanjiang, Yang Guizhong (2011)
synthesized opinions of above scholars, thought the cooperative performance indicators system
should be based on the valuation system of the research group of Zhejiang province agriculture hall,and add the ecological performance and innovation performance.
In empirical research on the cooperative performance evaluation, the western scholars more focusedon the economic efficiency of the cooperatives than the comprehensive performance, and more used
the financial analysis method, but there have been empty of empirical research with clear and fair onthe cooperative performance.The western scholars don't pay much attention to the performance of
the cooperatives, instead of paying more attention to revolution and innovation on the organization
system of the cooperatives in the new era (Xu Xuchu, 2010). At present, our country also have someexperts and scholars did empirical researches on the cooperative performance evaluation.Xu Xuchu,
Wu Bin(2010) based on the survey data of 526 cooperatives in Zhejiang province, using structural
equation modeling, researched the specific route and the relations between the cooperativegovernance mechanisms and the performance, considered the three factors, including the structure
of cooperative ownership, leading and the structure of council, has more influence on the
cooperative performance, a perfect governance mechanism is helpful to improve the farmers'professional cooperative performance. Liu Bin, Chen Chibo(2009) after put forward a performanceindicators, analysed the 22 cooperatives' comprehensive performance of Jiangxi province using the
efficacy coefficient method and the layered gathering method, thought cooperatives couldn't only
focus on quantity, and should adhere to value guidance of quality and amount pay equal attention to.Huang Shengzhong, Lin Jian (2008) using the survey data of 168 cooperatives in taizhou, wenzhou
and handan, based on the probability model method, concluded that cooperatives with the good
internal government mechanism, the performance is better.
In conclusion, the study of cooperative performance in China remains in the early stages, thoughthere has been some scholars make empirical research at present, but relatively less, and mainly
concentrated in the developed areas which in the eastern and central like ZhengJiang and Jiangxi
province, to west especially the hilly area, the farmers' professional cooperative performanceevaluation study also is even less.
3. Sample Selection and Data Sources
This paper takes the cooperatives that our country registers in industrial and commercial bureau
during July 12 007 to December 312 008 as research subject. In July 2009, we carried out
questionnaire investigation on thirteen cooperatives and its members from the nine counties of thehilly region like Xichong, Yingshan and so on. the interviewed target are mainly the chairman of the
cooperatives who have more comprehensive understanding to the whole situation of cooperatives,
so the questionnaire investigation have a high reliability.
4. Performance Evaluation System
Because the investigated cooperatives are still in its infancy, the effect of environment andcollective innovation of cooperatives is still not apparent at present, there is also a greater difficulty
to collect data. So this paper based on the Farmers' Specialized Cooperatives' performance
evaluation system with behavioral indicators and productive indicators proposed by the researchgroup of Zejiang province agriculture hall, measure the performance situation from the fives aspects
of organization operation, operation activities, membership benefits, organization development andsocial impact. Of which, the organization operation and operation activities belong to behavioral
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indicators, others belong to productive indicators.
Table 1: Weight Allocation of Performance Indicators of Farmers' Specialized Cooperatives
First grade
indexes
Second grade
indexsThird grade indexes
(X1) The overall satisfaction level that members to cooperative
(point) (0.075)Organization
operation
(0.15) (X2) The ratio of restitution earning to members according to the
cooperative transaction volume(%) (0.075)
(X3) The ratio of agricultural input products through purchasing and
distribution for members by the cooperative (%) (0.05)
(X4) The ratio of main product by unifing brand and saling (%)
(0.05)
(X5) The times of unifing technical and training for members by the
cooperative (time) (0.05)
Operation
activities
(0.2)
(X6) The ratio of standardized production scale to total scale ofmembers(%) (0.05)
(X7) Per capita annual net income of members (ten thousand)
(0.075)
(X8) The ratio of per capita annual net income of members above
the local average income (%) (0.075)
Membership
benefits
(0.2)(X9) The ratio of volume of trade between members and their
cooperative to the cooperative operating income per year (%) (0.05)
(X10) Total number of the members (number) (0.1)
(X11) The annual income of the cooperative operating (ten
thousand) (0.1)
(X12) The annual pure surplus of the cooperative (ten thousand)
(0.05)
Organization
development
(0.3)
(X13) The brand degree of the main product (point) (0.05)
(X14) The numbers of non local members drove by cooperatives
(member) (0.06)
(X15) The cooperative annual sale volume for the non local
members of the same products (ten thousand) (0.045)
Cooperative
performance
(1.0)
Social
impacts
(0.15)(X16) The comprehensive influencing degree on the cooperative
development of economy and society of local (point) (0.045)
5. Research Methods and Data Processing
5.1 The Efficacy Coefficient Method
Firstly,we used "the efficacy coefficient method" to deal with the original data.The efficacy
coefficient method is according to the principle of multiple objective programming theory, confirma satisfaction value and a unallowable value of every evaluation index, use the satisfaction value as
the upper limit and the unallowable value as the lower limit, calculate the satisfactory degree of each
index and so as to determine the index scores, through the weighted average for comprehensive,thus evaluate the comprehensive conditions of the research objects.The efficacy coefficient method
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calculate and score the evaluation objects from different aspects, just meet the requirements of
multiple indicator comprehensive evaluation performance in performance evaluation system of
cooperatives. In addition, the efficacy coefficient method through the efficacy function change eachindex from the different metrics to the same metrics, it can reduce the error and reflect the
cooperative performance objectively under the circumstances that every index value of the
cooperatives is very different, it's purpose is to evaluat the cooperative performance accurately andfairly.
The calculation formula of the "efficacy coefficient method" is: 6040)/()( += isXihXisXiXid ,
id is the actual value of index, ihX is the highest value of the index, isX is the lowest value of the
index, the normalized data through processing is between 60~100. Insert table 2 here.
5.2 The Layered Gathering Method
Then using the layered gathering method to analysis the cooperative performance value, the formula
is iiijij xxx /)( = , ijx is the standardized value of the index, ijx is the practical value of index, ix is
the mathematical expectation of each index,i
is the standard deviation of each index. Insert table 3
here.
5.3 Ccomprehensive Evaluation Value
Finally, according to the predetermined weight of each indicator, calculate the comprehensive
evaluation value of the cooperatives, the formula is =16
1jiXiWjA
, jA means the performance evaluation
value of cooperative J, W is the weight of index i, jiX is the performance indicators standardization
of cooperative J. Through the calculation, we concluded the comprehensive evaluation value of
thirteen cooperatives performance.
Table 4: Sort for the Performance Comprehensive Evaluation Value
of Farmers' Specialized Cooperatives
code 8 9 13 6 1 2 4 10 12 11 7 3 5
comprehensive
evaluation
value
1.277 0.483 0.386 0.367 0.213 (0.050) (0.183) (0.204) (0.316) (0.321) (0.484) (0.557) (0.612)
Note:The parentheses value means negative value.Performance comprehensive evaluation value fluctuates around zero,
the value that greater than zero instructions above average , the value that less than zero instructions below the average
level.
6. Analysis Results
Through the empirical analysis of the Farmers' Specialized Cooperatives performance in hilly area
of sichuan province, the results are as follows:
Firstly, The cooperative performance comprehensive evaluation value is not high. Based on thescores, there only five cooperatives that the performance comprehensive evaluation value is greater
than zero, only 38.5% of the total. It shows that there have a big gap among the cooperatives, even if
a certain scale, the cooperatives are difficult to achieve balance between social benefit and economic
benefit. Through the investigation, there have a direct relationship between the development of thecooperative and the superintendents, but the superintendents are undereducated that mainly focus on
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the junior-high school and around the average age of 45 year old, the management level of them is
limited, that will influence the development of the cooperatives.
Secondly, The whole evaluation of the cooperatives in operation management and membershipbenefits is good. From the results, we can see that 62% of the cooperative operating activities and
54% of the cooperative income above average, 77% of the cooperative members have a highersatisfaction to cooperatives, this show that the cooperatives have a higher organization production
management and make a great contribution to increase farmers' income. The cooperatives obtainedthe good approvals, but still need to be constantly improved.
Thirdly, The cooperative organization development potential is not strong, social impact to be
further improved. The two aspects of the organization development and social impact are only 31%
that above the average level of cooperatives. The main reason is the product operation andmarketing channels are relatively single, mostly only through the agricultural products dealers and
wholesaling companies,and rely on the government departments to sell products, The cooperatives
need to pay attention to the intensification of production and the diversification of sales. As thecooperatives are still at the initial stage of the development, the society affect is not obvious and still
need further development.
7. Brief Comment and Suggestion
Results from the analysis results of the empirical this paper, on the one hand, cooperatives in
operation management and membership benefits are better relatively than other aspects, some of acertain scale cooperatives not only made a contribution to increasing farmers' income, but also
played the lead role in social influence. But on the other hand, the performance comprehensive
evaluation of the Farmers' Specialized Cooperatives in hilly region of Sichuan province, thecompetition ability is very weak and is still in the primary stage of the development. Farmers'
Specialized Cooperatives is important organization related to the farmers and the development of
agriculture, so, the development of cooperatives should have not only quantity, but also quality.
The author thinks that the Farmers' Specialized Cooperatives in hilly region of Sichuan provincewould work harder to enhance their comprehensive strength in future. At microscope, firstly, the
internal operation mechanism should be constantly perfected, and the cooperatives should fully
implement the democratic governance of "civilian have, civilian battalion, civilian enjoyed",strengthen the management level of managers continually, arouse the enthusiasm of all staff.
Secondly, the cooperatives should develop and operate characteristic project, create brand, widen
the product sales channel, and improve competitiveness in the market. Thirdly, the hilly area is the
most area rare in agricultural resource in sichuan province, the cooperatives should have thebreakthrough and the innovation in land management system, overcome the weaknesses of land
operation inefficient by small farmers, and construct the scale operation models of small groups but
large scale. Fourthly, Varieties of agricultural products and abundant amount in the hilly region of
Sichuan province, there are favorable conditions relatively to develop farm products processingindustry. It not only can develop the cooperatives themself, but can drive to develop the surrounding
farmers, when it can raise the cooperatives' economic benefits, it can also promote commondevelopment in the social benefit and the ecological benefits.
In the macroscopic aspect, facing the status quo that the utilization rate of the agricultural
production is very low , rural infrastructure is still weak, the farmers' quality and education is poor,to want develop the Farmers' Specialized Cooperatives, the government should give various support.
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First, the government should fully gives cooperatives the policy support, including finance, tax,
financial, technical, personnel, education and training, protect agricultural products sales channel
smoothly, create the good external environment for the cooperatives. Second, external environmentshould be increasing the financial investment force, strengthen the infrastructure construction in
hilly region of sichuan, such as farmland irrigation construction, road construction,etc, provide the
external environment for cooperative development. Third, vigorously to attract leading companiesthat wide connection with the industry in hilly area and the impetus ability is strong, promote the
cooperation with scientific research institutes, provide strength and technical support for the
cooperatives.
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Appendix:
Table 2: Performance Indicators Standardization
of Farmers' Specialized Cooperatives in Hilly Area of Sichuan Province
code X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X12 X13 X14 X15 X16
1 80 92 89 86 85 81 96 100 96 61 61 77 70 60 63 60
2 100 68 100 100 70 68 78 91 98 60 60 60 80 60 60 33
3 80 60 60 96 60 60 64 64 94 62 61 89 80 63 67 60
4 80 68 86 85 80 74 100 91 85 63 60 61 70 61 61 33
5 80 63 81 60 75 64 66 75 60 60 61 96 60 60 100 33
6 100 95 86 76 80 95 84 87 85 61 80 89 60 60 74 87
7 60 68 77 81 85 94 60 60 91 65 60 64 90 60 62 60
8 80 73 83 97 100 100 79 93 94 100 100 92 100 100 68 100
9 80 87 86 81 70 79 81 97 78 79 79 99 90 62 79 87
10 60 74 84 99 85 74 72 84 95 65 60 68 80 61 61 60
11 80 82 77 95 70 61 77 80 91 62 61 62 80 61 61 33
12 60 92 71 96 60 76 70 79 93 64 60 79 80 60 62 60
13 80 100 88 93 65 81 93 96 100 63 66 100 80 60 73 60
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Table 3: Analysis on Performance Indicators
of Farmers' Specialized Cooperatives in Hilly Area of Sichuan Province
Note:The parentheses value means negative value.
X1 X2 X3 X4 X5 X6 X7 X8 X9 X10 X11 X12 X13 X14 X15 X16
The mean 78.46 78.71 82.27 88.08 75.77 77.38 78.46 84.31 89.16 66.51 67.04 79.68 78.46 63.71 68.47 58.97
Standarddeviation
12.81 13.39 9.80 11.56 11.52 12.86 12.45 12.47 10.61 11.22 12.12 15.35 11.44 10.94 11.20 22.09
Coefficient
ofvariation
0.16 0.17 0.12 0.13 0.15 0.17 0.16 0.15 0.12 0.17 0.18 0.19 0.15 0.17 0.16 0.37
1 0.12 0.99 0.74 (0.20) 0.80 0.25 1.44 1.26 0.67 (0.50) (0.49) (0.20) (0.74) (0.33) (0.48) 0.05
2 1.68 (0.80) 1.81 1.03 (0.50) (0.76) (0.02) 0.51 0.85 (0.56) (0.54) (1.28) 0.13 (0.34) (0.76) (1.16)
3 0.12 (1.40) (2.27) 0.66 (1.37) (1.35) (1.19) (1.63) 0.44 (0.40) (0.47) 0.64 0.13 (0.06) (0.12) 0.05
4 0.12 (0.80) 0.41 (0.27) 0.37 (0.30) 1.73 0.51 (0.43) (0.35) (0.58) (1.24) (0.74) (0.26) (0.65) (1.16)
5 0.12 (1.16) (0.12) (2.43) (0.07) (1.03) (1.00) (0.77) (2.75) (0.58) (0.49) 1.05 (1.61) (0.34) 2.81 (1.16)
6 1.68 1.23 0.41 (1.07) 0.37 1.39 0.46 0.19 (0.43) (0.52) 1.06 0.64 (1.61) (0.32) 0.52 1.25
7 (1.44) (0.80) (0.55) (0.58) 0.80 1.26 (1.48) (1.95) 0.15 (0.15) (0.54) (1.01) 1.01 (0.33) (0.59) 0.05
8 0.12 (0.44) 0.09 0.78 2.10 1.76 0.07 0.72 0.44 2.98 2.72 0.78 1.88 3.32 (0.08) 1.86
9 0.12 0.63 0.41 (0.64) (0.50) 0.16 0.17 1.04 (1.01) 1.14 1.01 1.26 1.01 (0.18) 0.90 1.25
10 (1.44) (0.32) 0.20 0.97 0.80 (0.30) (0.51) (0.02) 0.56 (0.13) (0.54) (0.73) 0.13 (0.28) (0.69) 0.05
11 0.12 0.28 (0.55) 0.60 (0.50) (1.26) (0.12) (0.35) 0.15 (0.40) (0.49) (1.17) 0.13 (0.25) (0.65) (1.16)
12 (1.44) 0.99 (1.20) 0.72 (1.37) (0.07) (0.70) (0.45) 0.33 (0.22) (0.55) (0.05) 0.13 (0.30) (0.61) 0.05
13 0.12 1.59 0.63 0.41 (0.93) 0.25 1.15 0.94 1.02 (0.31) (0.10) 1.32 0.13 (0.32) 0.38 0.05
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