Procedures of Shanghai Municipality on the Implementation of the Law of the People’s Republic of China on the Farmers’ Professional Cooperatives

english.shanghai.gov.cn

(March 19, 2020)

Chapter I General Provisions

Article 1

With a view to standardizing the organization and acts of the farmers’ professional cooperatives in this Municipality, protecting the legitimate rights and interests of the farmers’ professional cooperatives and their members, encouraging, supporting and guiding the high-quality development of the farmers’ professional cooperatives, effectively promoting the construction of the “Beautiful Homeland”, “Green Countryside” and “Happy Paradise” projects in this Municipality’s rural areas, and promoting the implementation of the rural revitalization strategies, these Procedures are formulated in accordance with the relevant laws and administrative rules such as the Law of the People's Republic of China on Farmers’ Professional Cooperatives and the actual circumstances of this Municipality.

Article 2

These Procedures are applicable to the setup, operation, relevant support, management and other activities of the farmers’ professional cooperatives in the administrative areas of this Municipality.

The term “the farmers’ professional cooperatives” as mentioned in these Procedures refers to the mutually supportive economic organizations with voluntary association and democratic management of the producers and operators of agricultural products or the providers and users of agricultural production and operation services, on the basis of the rural household contract management.

Article 3

The Party organizations in the farmers’ professional cooperatives are set up in accordance with the Constitution of the Communist Party of China and the Party’s rules and regulations. The farmers’ professional cooperatives shall provide necessary conditions for the activities of the Party organizations.

Article 4

The municipal and district people’s governments shall incorporate the development of the farmers’ professional cooperatives into the national economic and social development planning, set up and improve the financial input and funding guarantee mechanisms, formulate policies and measures, and promote the development of the farmers’ professional cooperatives.

This Municipality shall set up comprehensive coordination mechanisms for the farmers’ professional cooperatives, coordinate and study major issues in the development of the farmers’ professional cooperatives, and promote the construction and development of the farmers’ professional cooperatives.

Article 5

The municipal and district departments of agriculture and rural affairs and the town/township people’s governments shall, in accordance with their respective functions and duties, be responsible for the guidance, support, service and supervision of the farmers’ professional cooperatives within their respective administrative areas.

The municipal and district departments of development and reform, finance, economic informatization, market supervision, commerce, science and technology, finance, taxation, planning and resources, human resources and social security, education, grain and material reserves, forestry, water affairs, ecological environment and other departments shall, in accordance with the division of responsibilities, jointly promote the development of the farmers’ professional cooperatives.

Article 6

This Municipality shall support the high-quality development, innovation of cooperation models and mechanisms, and expansion of the operation contents and fields of the farmers’ professional cooperatives. It shall also encourage the farmers’ professional cooperatives of the same industries or closely related to in their industries to develop cooperation and association on a voluntary basis.

Article 7

This Municipality shall fully implement the national strategies of regional integration development in the Yangtze River Delta, set up cooperation mechanisms with relevant provinces in the Yangtze River Delta region to promote the development of the farmers’ professional cooperatives, and promote the complementary advantages and coordinated development of the farmers’ professional cooperatives in the Yangtze River Delta region; encourage the farmers’ professional cooperatives to cooperate with the farmers’ professional cooperatives in other regions in China, and promote international exchanges.

Chapter II Setup and Operation

Article 8

Those setting up farmers’ professional cooperatives shall apply to the market supervision departments for registration and obtain the legal person business licenses of the farmers’ professional cooperatives. Without legal registration and business licenses, no one shall engage in production and business activities in the name of farmers’ professional cooperatives.

In case of any change in the name, total amount of capital contribution, legal representative and other legal registration items of the farmers’ professional cooperatives, an application for change registration shall be filed with the original registration authorities within 30 days from the date of making the change resolution.

Article 9

With their members as the main service objects, the farmers’ professional cooperatives shall carry out one or more of the following businesses:

1. purchase and use of means of agricultural production;

2. planting, breeding and fishing production;

3. agricultural products production, sales, processing, transportation, storage and other related services;

4. agricultural machinery operation and maintenance services;

5. development and operation of rural folk crafts and products, leisure agriculture and rural tourism resources; and

6. technology, information, facility construction and operation services related to agricultural production and operation.

Article 10

In order to set up the farmers’ professional cooperatives, the articles of association shall be formulated in accordance with the law and adopted unanimously by all the founders. The business norms formulated by farmers’ professional cooperatives may be used as an appendix to the articles of association.

The farmers’ professional cooperatives shall be encouraged to use the model texts of the articles of association. The municipal department of agriculture and rural affairs shall, together with the municipal market supervision department, formulate the model texts of the articles of association of the farmers’ professional cooperatives.

Article 11

The citizens with civil capacities, as well as enterprises, institutions or social organizations engaged in production and operation activities directly related to the business of the farmers’ professional cooperatives may become members of the farmers’ professional cooperatives when they are capable of making use of the services provided by the farmers’ professional cooperatives, recognize and abide by the articles of association of the farmers’ professional cooperatives, and fulfill the entry procedures stipulated in the articles of association,.

Article 12

Those members of the farmers’ professional cooperatives meeting any of the following conditions shall be included in the proportion of the farmer members:

1. having agricultural household registrations;

2. having the land contract management certificates;

3. having the certifications of the members of the rural collective economic organizations.

Those without household registrations in this Municipality shall be included in the proportion of the farmer members when they set up or join the farmers’ professional cooperatives in this Municipality, meet one of the situations mentioned in the preceding paragraph, and rent land or water surface in this Municipality.

Farmers shall account for at least 80% of the total members of a farmers’ professional cooperative.

Article 13

In addition to the provisions of Article 12 of these Procedures, the following units and individuals may also give full play to their own advantages, set up and join the farmers’ professional cooperatives in accordance with the law:

1. rural collective economic organizations;

2. agricultural scientific research units and agricultural technical service organizations;

3. grassroots supply and marketing cooperatives;

4. leading enterprises of agricultural industrialization and family farms;

5. agriculture technicians; and

6. other organizations and personnel dedicated to agricultural development.

Article 14

The members of the farmers’ professional cooperatives shall fulfill their obligation of capital contribution in accordance with the mode, amount and time limit of capital contribution stipulated in the articles of association, and participate in the distribution of surplus in accordance with the provisions of the law and the articles of association.

Where those members of the farmers’ professional cooperatives make capital contribution in the form of land management rights, forest rights, etc. according to law, the purposes of the land shall not be changed, and the periods of investment shall not exceed the remaining periods of the land management right, forest right, etc.

Article 15

After the death of the natural person members of the farmers’ professional cooperatives, their membership shall be terminated. The farmers’ professional cooperatives shall, in accordance with the methods and time limits prescribed in the articles of association, return the amount of capital contribution and the share of accumulation fund recorded in the members’ accounts, and return the assignable surplus, apportion the loss and debt before the termination of the qualification according to law.

Article 16

In the election and voting of the general meetings of the farmers’ professional cooperatives, the one person one vote system shall be implemented, with each member having the basic voting right of one vote.

The members with large amount of capital contribution or transactions with the cooperatives may enjoy additional voting rights in accordance with the articles of association. The total number of additional votes of the cooperatives shall not exceed 20% of the total number of the basic votes.

The articles of association of the farmers’ professional cooperatives may stipulate the circumstances in which the additional voting rights may not be exercised, and may also stipulate the upper limits for the combined exercise of the basic voting rights and the additional voting rights.

Article 17

The chairmen, directors, executive supervisors or members of the board of supervisors shall be elected by the general meetings from the members of the cooperatives according to law, and shall exercise their functions and powers in accordance with laws, rules and the articles of association, and be responsible for the general meetings.

Article 18

The farmers’ professional cooperatives shall set up and improve the financial management systems, set up accounting books, and set up member accounts for each member.

The farmers’ professional cooperatives shall set up accounting agencies or accountants in relevant agencies according to law; those unable to meet the setting up conditions shall entrust the intermediaries which are approved to set up for engaging in accounting bookkeeping business for their bookkeeping and accounting.

In addition to the contents prescribed by law, the member accounts shall also record the following contents:

1. the quantitative shares of property formed by the direct subsidies from the State finance;

2. the quantitative shares of property donated by others;

3. the shares of surplus returned from the farmers’ professional cooperatives.

Article 19

The farmers’ professional cooperatives shall have the rights to possess, use and dispose of the properties formed by the direct subsidies from the State finance, and shall be liable for the debts with the said properties.

In the event of dissolution or bankruptcy, liquidation of the farmers’ professional cooperatives, the disposal of the above-mentioned properties shall be carried out in accordance with the relevant provisions of the State and this Municipality.

Article 20

The farmers’ professional cooperatives that accept donations from others may enjoy the rights to the donated properties in accordance with the donation agreements. The donated properties not clearly defined in the provisions of the donation agreements shall be deemed as the properties of the farmers’ professional cooperatives, which may dispose of them according to law.

Article 21

The farmers’ professional cooperatives shall set up separate accounts for the properties formed by direct State financial subsidies and the properties donated by others, and accept the audit of the relevant departments or the supervision of the donors.

Article 22

The farmers’ professional cooperatives shall set up production records or quality and safety accounts of agricultural products, improve the quality and safety management systems and inspection and testing systems of agricultural products, implement the quality and safety traceability systems of agricultural products, and improve the quality and safety of agricultural products.

Article 23

The following matters of the farmers’ professional cooperatives shall be made public to their members:

1. implementation of major business decisions of the farmers’ professional cooperatives;

2. properties formed by direct State financial subsidies and donations from others;

3. other matters concerning the vital interests of their members.

At the end of the fiscal year, the farmers’ professional cooperatives shall announce their operation and financial status to their members and accept their supervision.

Article 24

The farmers’ professional cooperatives are encouraged to develop cooperation with products and industries as links in accordance with their development needs, and voluntarily form the federations of the farmers’ professional cooperatives.

The federations of the farmers’ professional cooperatives shall, in accordance with the provisions of laws, rules and the articles of association, carry out production and operation activities and enjoy the relevant preferential policies of the farmers’ professional cooperatives.

Article 25

The federations of the farmers’ professional cooperatives shall set up general meetings attended by all their members, and may, as required, set up boards of directors, boards of supervisors or executive supervisors.

The chairmen and directors of the federations of the farmers’ professional cooperatives shall be the persons selected by the member cooperatives. The chairmen of the boards of directors and the chairmen of the boards of supervisors (executive supervisor) shall not be produced in the same member cooperatives.

Chapter III Promotion and Development

Article 26

The municipal and district people’s governments shall incorporate the funds for promoting the development of the farmers’ professional cooperatives into their respective financial budgets, and focus on supporting the infrastructure construction, quality standard certification, marketing, technological innovation and promotion, personnel training and other matters of the farmers’ professional cooperatives by way of financial subsidies, loan discount, construction first and then compensation.

Article 27

The departments of science and technology, agriculture and rural affairs shall encourage the farmers’ professional cooperatives to jointly apply with scientific research units for relevant science and technology projects and support them to carry out research and development and services related to agricultural production and operation.

The departments of science and technology, agriculture and rural affairs shall give guidance and support to the farmers’ professional cooperatives in cultivating and introducing new varieties and applying new technologies.

The organizations such as agricultural scientific research institutions, institutions of higher learning, technical popularization institutions and scientific and technological associations shall provide technical consultation, popularization of science and other services for the farmers’ professional cooperatives.

The experts with rich experiences in agricultural practice shall be encouraged to provide technical support for the farmers’ professional cooperatives.

Article 28

Agriculture technicians and graduates from junior colleges and technical secondary schools shall be encouraged to work in the farmers’ professional cooperatives.

Agricultural technicians and graduates from junior colleges and technical secondary schools working in the farmers’ professional cooperatives may, in accordance with the provisions of this Municipality, be given priority to the professional titles under the same conditions.

Article 29

The members of the farmers’ professional cooperatives registered in this Municipality may participate in the social insurance for urban workers in accordance with the provisions of this Municipality.

The employees engaged in agricultural labor in the farmers’ professional cooperatives may apply for flexible employment registration in accordance with the provisions of this Municipality.

Article 30

The agricultural technicians and graduates from junior colleges and technical secondary schools without household registration in this Municipality working in the farmers’ professional cooperatives may apply for residence permit points according to the relevant provisions of this Municipality’s residence permit points management and enjoy the corresponding public services; those who meet the provisions of this Municipality’s settlement policies may apply for registered permanent residence in this Municipality.

Article 31

The town/township people’s governments shall designate or employ counselors of the farmers’ professional cooperatives to provide services such as business guidance, policy consultation and financial accounting guidance for the farmers’ professional cooperatives, so as to promote the standardized development of the farmers’ professional cooperatives.

The departments of agriculture and rural affairs shall strengthen the management of counselors and regularly carry out professional knowledge and skills training for the counselors.

Article 32

For the farmers’ professional cooperatives that meet one of the following conditions, priority shall be given to support in terms of financial subsidies, loan discount and other aspects:

1. having the certification of good agricultural standards, food safety management system and the certification of quality management system;

2. having the certification of green food and organic products;

3. having geographical indications for agricultural products; and

4. having brands of agricultural products with local characteristics.

Article 33

The farmers’ professional cooperatives shall enjoy the preferential tax policies for agricultural production, processing, circulation, service and other agriculture-related economic activities prescribed by the State.

Article 34

The financial institutions shall be encouraged to increase the loan support to the farmers’ professional cooperatives and their members, improve the evaluation mechanisms of collateral and pledge, actively carry out the liquidity loans and medium and long-term loan business matching the agricultural production and operation cycles, and simplify the loan approval processes.

Insurance institutions shall be encouraged to provide comprehensive insurance services that meet the needs of the upgrading and development of the farmers’ professional cooperatives. They shall be encouraged to set up and improve the whole process risk product systems including crop production, transportation, storage, processing and sales of agricultural products, expand the coverage of agricultural insurance, raise the compensation standards of agricultural insurance, and strengthen the abilities of the farmers’ professional cooperatives to withstand risks.

Article 35

Where the farmers’ professional cooperatives need construction land to set up processing enterprises or need agricultural land for facilities, the planning and resources departments shall give priority to the arrangement of land use plans and handle land use procedures in a timely manner on the premise of conforming to the land spatial planning and agriculture-related planning.

The farmers’ professional cooperatives engaged in planting and breeding shall enjoy the State’s preferential electricity prices for agriculture; the farmers’ professional cooperatives engaged in the primary processing of agricultural products or in line with other relevant regulations may apply for the preferential time-of-use electricity prices for agricultural production.

Article 36

The departments of agriculture and rural affairs, commerce, education, grain and material reserves shall take measures to help the qualified farmers’ professional cooperatives to build platforms connecting agriculture and business, production and marketing with chain supermarkets, food processing or catering service enterprises, colleges and universities and logistics procurement units of large enterprises so as to expand new circulation channels of agricultural products.

Article 37

The farmers’ professional cooperatives with production and operation scales and export capacities shall be encouraged and supported to participate in the exhibitions with international influence, promotion conferences and other activities, carry out technical exchanges and expand international markets.

Article 38

The truckload transport of fresh agricultural products of the farmers’ professional cooperatives shall be listed in the State’s Catalogues of Fresh Agricultural Products and enjoy preferential road tolls in accordance with relevant state regulations.

Article 39

The supply and marketing cooperatives shall be encouraged to do a good job in the cultivation and service of the farmers’ professional cooperatives via leading the setup, capital injection, project support, talent training, market development, services of production, supply and marketing and other forms.

Chapter IV Standardization and Management

Article 40

The departments of agriculture and rural affairs and market supervision shall strengthen the supervision of the farmers’ professional cooperatives, guide the farmers’ professional cooperatives to set up and improve the systems of internal operation, financial accounting, production and operation management, and promote the standardized development of the farmers’ professional cooperatives.

Article 41

The departments of agriculture and rural affairs shall, together with the relevant departments, formulate and improve the standards for the demonstration cooperatives of the farmers’ professional cooperatives, evaluate and recognize the demonstration cooperatives of the farmers’ professional cooperatives, and provide support in accordance with the relevant provisions of the State and this Municipality.

The departments of agriculture and rural affairs shall establish and improve the dynamic monitoring systems for the demonstration cooperatives of the farmers’ professional cooperatives, and regularly monitor the operation of the demonstration cooperatives of the farmers’ professional cooperatives.

Article 42

The farmers’ professional cooperatives shall be supported and encouraged to set up federations according to their professional characteristics.

The federations of the farmers’ professional cooperatives shall strengthen the self-discipline and integrity construction of the farmers’ professional cooperatives, guide the farmers’ professional cooperatives and their members to improve the quality of development, and safeguard the legitimate rights and interests of the farmers’ professional cooperatives and their members.

Article 43

The agriculture and rural affairs department shall set up and improve the systems of quality and safety management, control and traceability systems of agricultural products, guide the farmers’ professional cooperatives to carry out agricultural standardized production, promote green production modes, develop circular agriculture, and provide consultation, guidance and services for the farmers’ professional cooperatives in their application for quality and safety certification of agricultural products.

The departments of agriculture and rural affairs shall organize the quality supervision and random inspection of agricultural products of the farmers’ professional cooperatives. The lists and results of spot checks on the farmers’ professional cooperatives shall be made public.

Article 44

The departments of market supervision shall share the relevant registration information with the departments of agriculture and rural affairs via the legal person information sharing and application systems of this Municipality after the setup, alteration or cancellation of registration of the farmers’ professional cooperatives.

Article 45

The farmers’ professional cooperatives shall, in accordance with the relevant provisions of the State, submit annual reports to the market supervision authorities and make them known to the public.

The departments of market supervision shall organize random inspection of the annual report information of the farmers’ professional cooperatives. The lists and results of random inspection of the farmers’ professional cooperatives shall be made public via the enterprise credit information publicity systems.

Article 46

The departments of agriculture and rural affairs and the relevant departments shall, in accordance with the relevant provisions of the State and this Municipality, record the dishonest acts in the production and operation activities of the farmers’ professional cooperatives, and send the information to the public credit information service platforms of this Municipality in accordance with the law.

Article 47

The farmers’ professional cooperatives shall carry out business activities in accordance with the law. Where they have not engaged in business activities for two consecutive years, their business licenses shall be revoked in accordance with the law.

The dissolution and liquidation of the farmers’ professional cooperatives shall be handled in accordance with the relevant laws and regulations of the State. Where the farmers’ professional cooperatives independently apply for cancellation of registration, the departments of agriculture and rural affairs, market supervision, taxation, etc. shall provide them with convenient services.

Article 48

Where dispute arise between the farmers’ professional cooperatives and their members, they may settle them through consultation or apply for mediation, or they may file lawsuits with the people’s courts according to law.

Where the farmers’ professional cooperatives and their members apply for mediation in accordance with the provisions of the preceding paragraph, the town/township people’s governments, the village (residential) people’s committee and the people’s mediation organizations shall provide mediation.

Chapter V Legal Liability

Article 49

Where there are provisions on the handling of acts in violation of these Procedures in laws and administrative rules, such provisions shall prevail.

Article 50

Where the administrative organs or their staff members commit any of the following acts, the persons in charge who are directly responsible and other persons who are directly responsible shall be given administrative sanctions according to law; if losses are caused to the farmers’ professional cooperatives, they shall be liable for compensation according to law; if crimes are constituted, they shall be investigated for criminal liabilities according to law:

1. fraudulently obtaining State financial subsidies;

2. forcing or obstructing farmers or other units or individuals to set up, join or withdraw from the farmers’ professional cooperatives; or

3. other acts of dereliction of duty, abuse of power, favoritism and malpractice, infringing upon the legitimate rights and interests of the farmers’ professional cooperatives and their members.

Article 51

Where the farmers’ professional cooperatives and their management personnel obtain government supported projects and funds by the means of fraud, concealing the real situation, etc., the relevant departments shall recover the project funds and investigate the corresponding responsibilities according to law.

Article 52

Where the chairmen, directors and managers of the farmers’ professional cooperatives commit any of the following acts, resulting in property loss and other legitimate interest damage of the farmers’ professional cooperatives, they shall bear the liabilities for compensation according to law; if crimes are constituted, they shall be investigated for criminal liabilities according to law:

1. seizing, misappropriating or privately distributing the assets of the cooperatives;

2. lending the funds of the cooperatives to others, making outbound investment or providing guarantee for others with the assets of the cooperatives in violation of the provisions of the articles of association or without the consent of the general meetings;

3. accepting the commission of the transaction between others and the cooperatives as their own or transferring debts to the cooperatives;

4. making decisions in violation of the articles of association, damaging the legitimate rights and interests of the cooperatives and their members; or

5. engaging in other activities that damage the economic interests of the cooperatives.

Chapter VI Supplementary Provisions

Article 53

These Procedures shall be effective as of May 1, 2020.