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Cooperatives founded by farmers will soon enjoy legal status as Chinese legislators gathered Saturday to discuss a draft law to better protect farmers' business interests.

 

"How to help rural household better combat natural and market risks in business operation and connect small and sporadic household businesses with domestic and international markets are major issues in facilitating agricultural and rural economic development," said Li Chunting, member of the National People's Congress (NPC) Standing Committee.

 

The draft law on farmers' professional cooperatives was presented to the legislators for the first deliberation, as household business, major backbone of China's rural economy, has become ever vulnerable when facing more and more competitive market.

 

Currently, China has no law or administrative regulations defining the legal status of rural cooperatives, which in turn fails to obtain government registration to guarantee their daily operation.

 

Zhou Yongfu, a florist in Songming County in southwest China's Yunnan Province, thought of making a fortune out of selling lily but only found the price dropped well below its cost as lilies flooded the market in 2004.

 

"What if we flower farmers worked together to tap the market, to study market information," he recalled.

 

According to statistics from the Ministry of Agriculture, China has over 150,000 economic cooperatives in the countryside, whose 23 million members account for 9.8 percent of the total rural households.

 

Without basic legal regulations, many cooperatives fail to have a sound in-house operation mechanism and leave their farmer members' economic rights and interests in risk.

 

The proposed draft law stipulates that farmers' cooperatives are organizations for mutual assistance set up by farmers who produce similar agricultural products or offer and use similar farming services based on household contract system.

 

To protect farmers' business interests, the draft law requires cooperatives to set up an account for every member and define their individual financial rights as a basis for profit and liability sharing.

 

(Xinhua News Agency June 25, 2006)