China's top legislature on Tuesday ratified the law on farmers
cooperatives to better protect farmers' business interests.
The law, which was ratified at the 24th Session of the 10th
Standing Committee of the National People's Congress on Tuesday,
will take effect on July 1 next year.
It requires cooperatives to set up an account for every member
and define their individual financial rights as a basis for sharing
profits and liabilities.
It also allows for the prosecution of cooperative directors who
misappropriate or embezzle funds.
The law stipulates that cooperatives are organizations for
mutual assistance set up by farmers who produce similar products or
offer and use similar farming services based on a household
contract system.
"Rural cooperatives can effectively accelerate the entry of
agricultural products into the market, which can help rural
households better combat natural and market risks," said Zhang
Yongjun, a representative of the National People's Congress.
The draft law, presented to legislators for the first
deliberation in June, recognized that household businesses, a major
backbone of China's rural economy, have become more vulnerable in
the more competitive market.
According to the Ministry of Agriculture, China has more than
150,000 rural economic cooperatives, whose 23 million members
account for 9.8 percent of the total rural households.
Without basic legal regulation, many cooperatives lack sound
in-house operating mechanisms, putting members' economic rights and
interests at risk.
(Xinhua News Agency November 1, 2006)