Chapter I General Provisions

Article 1 This Law is enacted for the purpose of supporting and guiding the development of specialized farmers cooperatives, regulating their organization and behavior and protecting their lawful rights and interests and those of their members’, and promoting the development of agriculture and of the economy of rural areas.

Article 2 Specialized farmers cooperatives are mutual-help economic organizations joined voluntarily and managed in a democratic manner by the producers and operators of the same kind of farm products or by the providers or users of services for the same kind of agricultural production and operation.

Specialized farmers cooperatives mainly serve their members, offering such services as purchasing the means of agricultural production, marketing, processing, transporting and storing farm products, and providing technologies and information related to agricultural production and operation.

Article 3 Specialized farmers cooperatives shall observe the following principles:

(1) Their members are mainly farmers;

(2) They aim to serve their members, working for the common interests of all the members;

(3) The members join the cooperatives voluntarily and are free to withdraw from them;

(4) The members are equal in status and democratic management is practiced; and

(5) Profits are to be distributed mainly in proportion on the volume (amount) of the transactions effected between the cooperatives and their members.

Article 4 Specialized farmers cooperatives shall be registered according to this Law to obtain the status of a legal person.

Specialized farmers cooperatives shall enjoy the rights to possess, use and dispose of their property which includes capital contributions by their members, common reserve funds, subsidies received directly from the government, donations and other legitimately acquired assets, and shall be liable for their debts with the aforementioned property.

Article 5 Members of specialized farmers cooperatives shall be accountable to their cooperatives within the limits of the capital contributions recorded in their accounts and of their shares of the common reserve funds.

Article 6 The State protects the lawful rights and interests of the specialized farmers cooperatives and their members, and no units or individuals may infringe upon such rights and interests.

Article 7 In production and operation, specialized farmers cooperatives shall obey the relevant laws and administrative regulations, observe social and business ethics, and act in good faith.

Article 8 The State promotes the development of specialized farmers cooperatives through such measures as government financing, preferential taxation, support in fund raising, science and technology as well as human resources, and guidance through industrial policies.

The State encourages and supports all social sectors to provide services to specialized farmers cooperatives.

Article 9 People’s governments at or above the county level shall make arrangements for the administrative departments of agriculture and the relevant departments and organizations to provide guidance, support and services to the formation and development of specialized farmers cooperatives, in accordance with this Law and within the limits of their respective duties.