How prudent are rural households in developing transition economies:

Rural households in developing economies frequently use precautionary saving to cope with income risk. Such prudent behavior can be strengthened in transition economies where more risks are typically faced by households during and after reforms. This paper uses a rich panel of rural households in Zhejiang, China, to examine the correlation between income uncertainty and the target ratio of wealth to permanent income as suggested by the buffer-stock model. The empirical results suggest that Chinese rural households hold a significant level of wealth to mitigate the adverse impacts of income risk. Simulation results show that an increase in income risk leads to a sharp increase in household wealth and precautionary saving could drop substantially if income risk is eliminated. The high level of prudence of rural households under economic transition can help us better understand the developments in China, which will have policy implications for both developing and transition countries.buffer-stock model, Income risk, precautionary saving,

China Pear Value Chain: Implication for Smallholders

The objective of this paper is to describe different types of value chain, to capture value added activities of each chain, to discuss the organizational and institutional link in each value chain and its implications for the role of small farmers. We focus on two counties in Hebei and Zhejiang of China. Taking pear for example, analysis of value chain is conducted using data of representative samples of pear value chain. For each chain, value added activities, cost composition, profit distribution, organizational and institutional linkages are illustrated, and corresponding conclusions are indicated. After a systematic analysis of organizational and institutional linkage and value adding activities of every chain as well as cost-benefit analysis of smallholders, we found that: value-added of each value chain are different, smallholders hardly benefit from value chains of Hebei case. Farmer cooperatives are helpful for smallholders in terms of costs reducing and value adding. Influence of modern retailers such as supermarket in term of tradition fruit growers is limited in our cases. Downstream stage took most profit of value adding. Comprehensive supermarket is less competitive than professional fruit supermarket and even small fruit store in terms of procurement costs and operating costs. Taking household labor cost into account, net profit and labor compensation of large scale household are higher than that of middle or small scale farmers

Core and Common Members in Chinese Farmer Cooperatives

This paper addresses the distinction between core members and common members in farmer cooperatives in China in terms of the allocation of ownership rights, decision rights, and income rights. Empirical results from a multiple case study indicate that the life cycle and the governance characteristics of farmer cooperatives in China differ from cooperatives in the West world. The genesis of cooperatives in China is due to entrepreneurial farmers and the government, rather than the bottom-up, collective action process of many small farmers. The distribution of equity capital, decision rights, and income rights is quite skewed towards core members. We conclude that the development of cooperatives in China adapts to the local economic and cultural environment and goes via an alternative way to cooperatives in the Western world