Farmers’ Cooperatives in China: A Typology of Fraud and Failure

Abstract

Since the 1990s, agricultural cooperatives—particularly what China calls Farmers’ Specialized Cooperatives—have experienced rapid expansion in China. After more than two decades of growth and policy support, what is the overall performance of the ever-increasing numbers of these cooperatives? We visited 50 cooperatives across the country, most of which had officially been lauded as successful, to make a first-hand evaluation of their overall status and performance. We argue that, judging by either international or Chinese standards, the vast majority of these agricultural cooperatives are not authentic and fail to deliver expected benefits to smallholders. We categorize them into five types: genuine cooperatives, shell cooperatives, de facto private agribusinesses, decooperativized cooperatives, and failed cooperatives. Four barriers impede the long-term prospects of authentic cooperatives: social differentiation, lack of trust, unpredictable markets, and poor policy design and implementation.

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