Abstract
      Data of the pear supply chain in Zhejiang province in China, based on semi-structure interviews with the managers of pear production and marketing organizations, are presented. Comparisons are made regarding an investor-owned firm, a traditional farmer cooperative and a new style farmer cooperative. The results of case analysis indicate that the IOF has higher value added efficiency than those of farmer cooperatives, while farmer cooperatives have several advantages in helping farmers over general firms, due to their special governance structure. Besides, an observation that new style cooperatives, compared with traditional cooperatives, gain larger share in value pie is implied.

Key words: Farmer cooperative, Invest-owned firm, Value added.

1. Introduction
      Due to intensified market competition and the entrance of supermarket into supply chain, it is becoming more difficult for small farmers to negotiate with others (Hu and Reardon, 2004). Small farmers are in a weak bargaining position. Farmers often gain a limited share of the value added of the entire chain. Responding to the market failure, organizations of different governance structure were established to help small farmers out. There is a substantial literature about the benefits and necessities of the development of organizations that help farmers to face with the big markets (Grossman and Hart, 1986; Hansmaan, 1996; Bingen and Howard, 2003; Stockbridge, 2003). Among these researches, farmer cooperative and investor-owned firm are the two most common organizations that closely relate to farmers. About the definition of the two organizations, this paper focuses on the objectives and the residual claims. An investor-owned firm is characterized by the objective of pursing benefits maximization of the shareholders or investors holding the residual claim, while a cooperative is defined as an association of persons joining together to achieve a common objective, and have both a transaction and ownership relationship with the organization. We investigate the claim that between these organizations are significant differences in the value added efficiencies of products, as well as the benefits that farmers gain. The main objectives of the study are to

The main objectives of the study are to
1) Know that if there are significant differences in the value added efficiencies between IOF, traditional cooperative and new style cooperative. If yes, then which form of organization is of higher value added efficiency?
2) Find out are there any key factors that help farmers to decide to participate or not while there are alternative organizations.
3) Address the question of what can be done to help farmers to gain larger value share in the pie.
The article is organized as follows. Section 2 reviews literature, compares the two governance structures, and formulates hypotheses. Section 3 is dedicated to methodology. Then cases and data are described in detail. In section 4, the results of the case study are shown and discussed. Finally, conclusions and recommendations for further research are formulated in section 5.

Value added efficiency and governance structure