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A Study on Community Options Participating in Ecological Agriculture

Author: SunJie
Tutor: WenRui
School: Jiangxi University of Finance
Course: Political Economics
Keywords: Community participation ecological agriculture options trading
CLC: F320
Type: PhD thesis
Year: 2012
Downloads: 187
Quote: 0
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Abstract


It is well known that, since the foundation of new China, with the advancing of chemical agriculture featured with mechanization, the related problems such as environmental pollution, food security and biodiversity decrease have become more serious day by day. Modernized agricultural production mode that is typical of widely using chemical fertilizers and pesticides has degraded the soil productivity and degenerated the environment. Therefore, it has been challenging the sustainability of agricultural production, In this context, the consensus in academics is that the ecological agriculture mode is the only choice for China’s agricultural development in the future. Besides, this issue has attracted concerns from many other social science researchers from the areas of sociology, politics, history, and environmental economics etc. However, agriculture has always been an industry with high risk and low stability, which is highly "dependent on the nature". Therefore, as a new mode for agriculture development, to adopt ecological agriculture is for sure a higher risk attempt to the main body of agriculture production. So the main problem to develop ecological agriculture is how to realize the coordination and integration of risks and incentives in agriculture production in farmers and partners from other communities."Community Participation" is a specific concept in politics. It usually refers to a series of purposeful activities of inhabitants from certain regions, civil societies and other nonofficial social organizations (it usually excludes the enterprises aiming only at profit-making), which supported by a certain project for management of public affairs. Some scholars regard it as a form of citizens’voluntary behaviors to perform their rights and responsibilities. In this sense,"Community Participation" is characterized with in-officiality and autonomy. Ecological agriculture is a beneficial career to upgrade the agricultural industry and has very strong and positive externality. It is no doubt that ecological agriculture can be regarded as the social and public affair, which also needs stakeholders involved as the main body. Option is an economic concept. It means the purchase of chance privilege which one can own after affording some risk compensation (some amount of currency or some equally valued materials) to another, that is, one can get chance privilege from some purchase at certain price during some time in the future. In this paper, the author will use the concepts of "Community Participation" and "option" to study the problems of ecological agriculture development. Accordingly, the author will define "community option participating in ecological agriculture" as a mode of agriculture production, in which stakeholders provide social fund to the farmers in a certain regional village (or cooperation organization) to develop ecological agriculture, and share the risk in way of option trading.Throughout the academic research of ecological agriculture development, domestic and foreign academic scholars mostly think the critical reason of insufficient ecological agriculture development is that farmers and villages are relatively in a weak status and they have limited rights. Other scholars think that the effective way to solve the lack of ecological agriculture development is to improve the ability of farmers and related communities and villages by way of connecting the development of ecological agriculture with rural governance. There are two ways to improve the ability of farmers and their villages while drive the development of ecological agriculture:one way is the government’s "empowerment" to community cooperation organizations, that is, to effectively drive community members to participate in ecological agriculture, through bottom-up processing (different from the forcing policy of government with administrative power) to remedy both disabilities of the market and the government from community level, by means of increasing the right, capacity, power and freedom of participants, farmers and the communities in the village. The second way is to establish the village community as the basic unit of cooperation framework, through urban and rural cooperation, attracting diversified main body like urban consumers, cooperation organizations etc. to participate in community ecological agriculture in villages, so as to expand the social capital network and achieve the sustainable agricultural production, which is believed to be one of the most effective ways of building ecological agriculture. The common value of the above-mentioned two kinds of researches, whether the "empowerment" theory, or "multiple subjective participation and expanding the social capital" theory, is that: they both believe that the foundation of ecological agriculture development is to expand or improve farmers’rights and interests; The second is that:both theories suggest enlarging the social capital network (including technical capital, organizational capital, marketing network capital, etc.) as an effective pushing force for the development of ecological agriculture. However, existing researches still worth further exploring. They ignore the link between the "rights" and "social capital" Government has given the "rights" to farmers, like the rights of agricultural production as a result of the household contract. But the "rights" is a bundle of rights. As the market continues to develop, the split and transfer of the "rights" as well as the flow of "social capital" to seek profit will be inevitable and the combination of the two is also the inevitable result of the deepening development of the market. This study is focused on the existing research results, from the perspective of a combination of both, to introduce option theory into the risk sharing analysis framework of ecological agriculture, trying to explore new and effective ideas for the development of ecological agriculture, which is to study that farmers split part of their production and operation rights given by the government and transfer those rights (ecological agricultural production inputs opportunity) to the market in the process of production, supply and sales. Meanwhile, the community as the carrier will introduce multiple-stakeholders to get social capital and achieve the development of ecological agriculture through the option transaction to share risks.This research thinks:farmers’"investment opportunity" of the ecological agricultural production is also a kind of right, which can be regarded as a real option, namely farmers sell "investment opportunity" of ecological agricultural production and get risk compensation (compensation is not limited to currency, it can include technology, social relations, marketing network, organization capital, etc.) in return; other participants buy "investment opportunity" and gain potentially multifunctional value derived from ecological agriculture development in the future. When it is put into market as some critical resource element to exchange with other stakeholders, it will make farmers get some social capitals in way of risk compensation, which include the technology, social relations, mutual trust and the expansion of marketing network and so on, and these expanded social capitals can stimulate the enthusiasm of the participation body and farmers in other communities, focusing on different interests to actively participate in and develop ecological agriculture in rural communities. Here lies the key difference in theories between this research and the researches above in terms of the connection between farmers’"rights", option trading and social capitals. At present, as for community options trading mode, we haven’t seen such research as "community option participating in ecological agriculture" and "operating investment opportunity"(all farmers) to expand farmers’ household social capitals in communities and villages to promote rural ecological agriculture development".However, from2005to2010, in villages Y and Z in Guangxi, they have made effective attempts of "community option participating in ecological agriculture" for fives years. This practice is mainly about the exchange in way of option trading between "right"(farmers) and "social capitals"(related benefit holders/stakeholders) to develop ecological agriculture. That is, the related stakeholders make the "investment opportunity"(farmers’holding) in option manner to share the risk and supply social capital to farmers in some certain region or some cooperation organizations to develop the ecological agriculture in the rural areas. Therefore, the operation process is separated into three parts:first is the operation of options trading system, including sharing natural risk and the option trading mode of natural risk sharing in "breeding and popularization of technology". The related transaction system is "farmer field school". On one hand, farmers sell one of their "investment opportunities"(technology adoption opportunity) of ecological agriculture production to the participating bodies. In this way, the participating bodies can gain related multifunctional values of the ecological agriculture with a certain price in the future. On the other hand, through purchasing farmers’"investment opportunities", participating bodies will provide farmers with organic technology promotion, technical subsidy, social communication between urban and rural areas, and information etc., to ensure the normal operation of producing network of organic agriculture products. The farmers get the social capital investment that they need. Thus, ecological agriculture production can develop by the combination of option trading system allowing sharing the natural risk, the operation of "investment opportunities" and the expansion of farmers’social capital. Second is the operation of options trading system, including the option purchase mode of "buying together" to share market risk. The related option trading mode is "to celebrate harvest". On one hand, farmers sell one of their "investment opportunities"(market participation opportunity) of ecological agriculture production to the participating bodies. In this way, the participating bodies can gain related multifunctional values of the ecological agriculture with a certain price in the future. On the other hand, through purchasing one of the farmers’"investment opportunities", participating bodies will provide farmers with organic technology promotion, technical subsidy, social communication between urban and rural areas, and information etc. to ensure the normal operation of producing network of organic agriculture products. Therefore, by the combination of option trading with market risk sharing,"investment opportunities" realizes the exchange with "social capital". Farmers can allocate main elements of producing resources in broader ways under such condition and carry out ecological agriculture production. Third is the operation of options trading system to share the institutional risk, including "third party financing" to share the system risk; in this way, option management is in cooperative organization, use of resources in option mode by the government administrative institutions and subordinate departments, related trading system mode, i.e."community fund management". Farmers sell one of their "investment opportunities"(organizational cooperation opportunity) of ecological agriculture production to the participating bodies. In this way, the participating bodies can gain related multifunctional values of the ecological agriculture with a certain price in the future. On the other hand, through purchasing one of the farmers’"investment opportunities", participating bodies will supply farmers with organic technology promotion, technical subsidy, social communication between urban and rural areas, and information to ensure the normal operation of producing network of organic agriculture products. Then, the community cooperation organization, the state administrative organs and their subordinate departments as well as environmental NGO ensure the development of ecological agriculture through the combination of options trading system sharing institutional risks, operation of "investment opportunity" and enlargement of social relation network.The five-year practice of ""community option participating in ecological agriculture" that was implemented in village Y and Z in county X of Guangxi has achieved some results as follows:firstly, the participators formed a right-responsibility structure of "options" focused on the common interest, minimizing the cost of the transaction between consumers and farmers household production. Secondly, based on the "options", different participators created a new mode of ecological agriculture production, operation and profiting, getting benefit from lower production cost. Thirdly, different participators continuously improved their capacities in sustaining the development for ecological agriculture, which resulted in that is that the resource can be put into exchange and be allocated efficiently. Therefore, objectives of ecological agriculture development are achieved including food security, environmental health, improvement of the farmer’s income and communication between urban and rural areas.Finally, based on the study of the practice which was implemented in village Y and Z in county X of Guangxi as referred before, the thesis analyzes the specific connotation of "community option participating in ecological agriculture", which helps to increase farmer’s social capital through "options":firstly,"community option participating in ecological agriculture", as a kind of "options trading mechanism with multiple-party sharing risks in ecological agricultural production" is urban and rural cooperation by integrating production and sales; secondly, the essence of "community option participating in ecological agriculture" is an efficient system of allocating resources with option motivation and obligation, which is formed by the participating partners of rural communities and farmers. The third is after long-term implementation of "community option participating in ecological agriculture", it will become a multicultural interactive carrier to realize dispersion systematization of agricultural production by farmers’household. Therefore, it is concluded that the core point of view of the paper is that to increase farmer households’social capital in the "option" mode through "community option participating in ecological agriculture" is a practical and alternative way to promote the development of ecological agriculture.

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