REACHING THE RURAL POOR THROUGH AGRICULTURAL COOPERATIVES IN MONGOLIA

This paper focuses on the cooperative sector in central Mongolia. Its aim is to provide new insights into the role and importance of cooperatives among poor rural populations. We analyse cooperatives’ inclusiveness of smaller herders and farmers and cooperatives’ governance structures. The research is based on data collected in selected provinces of the central Töv region. The data were collected for three distinctive target groups – cooperative board members, cooperative members and non‐members. We found that the cooperative sector in Mongolia is strongly affected by the governmental policy regarding wool subsidies, which provides subsidies only to cooperative members and has consequently caused rapid growth in the number of new, free‐riding cooperative members and led to very low levels of members’ self‐identification with their cooperatives. This policy also affects the inner organizational structures of cooperatives. Further, we found indications that poorer farmers tend not to be members of cooperatives and that the overall benefits for non‐members and the general community arising from local cooperatives are rather low.     

Organizational structure, redistribution and the endogeneity of cost: Cooperatives, investor-owned firms and the cost of procurement

As an organizational type, cooperatives are in general not the dominant form of enterprise. Nevertheless, cooperatives and cooperative-like organizations do play important roles in a number of sectors, suggesting that in some circumstances they are more efficient than other business forms. This paper explores the importance of membership goals on the relative efficiency of the cooperative form of organization. The cooperative cost (and hence production efficiency) advantage is directly linked to the goal alignment between the cooperative and its members, and is influenced by the extent of income redistribution between members and the degree of rent seeking that takes place in the organization. When there is no aversion to income inequality, the members produce at their first best levels. However, as aversion to inequality rises, the production profile of the members converges to the production profile generated when the members face an IOF. Regarding rent seeking, if the more (less) efficient members are able to get their profits valued more, total output is increased (decreased). As a consequence, consumers may benefit from the lobbying that occurs inside a cooperative where the powerful members are the most efficient agents.     

The regulatory effect of cooperation degree in increasing tobacco farmers’ income by mitigating production risk shocks

Context : Different from general agriculture, tobacco agriculture in China adopts the production mode of farmers’ cooperatives to instruct farmers to engage in tobacco agricultural production under a policy of tobacco control. In addition to providing convenience for industry technical standardization, the policy goal aims to cope with the impact of production risk shocks and ultimately ensure the modernization and transformation of the tobacco industry and the stability of income of farmers. Objective : This study intends to explore the influence mechanism of the different degrees of cooperation and participation in cooperatives on the income of tobacco farmers from the perspective of risk shocks. Methods : Through the quantitative methods of the OLS regression model, hierarchical regression model and moderation model, this paper analyzes the data of 393 farmers engaged in tobacco agricultural production in Shaanxi Province obtained from survey and empirically analyzes the relationship between the degree of cooperation and participation in cooperatives and income. Interaction terms between risk shocks and cooperation are introduced to verify the regulatory effect of participation in tobacco farmers’ professional cooperatives on mitigating risk shocks and improving agricultural income. Results and conclusions : The results show that while risk shocks, including natural risks, market risks and policy risks, negatively affect the income of tobacco farmers, the degree of cooperation and participation has a significant positive effect on the income of tobacco farmers, and the degree of peasant households’ participation in the professional cooperative of tobacco farmers as a moderator variable has a regulatory effect on mitigating the impact of risk shocks on the income of tobacco farmers. The mechanism of action is that tobacco farmers participate in cooperatives to a higher degree, which can further promote the association of farmers and jointly resist risk shocks by reducing production costs, improving the technical level, and strengthening risk prevention and other measures to improve the income level. Significance : It would be helpful to encourage tobacco farmers to take the initiative to participate in the daily management-related affairs and decisions of cooperatives, strengthen technical training, obey cooperative management, and actively respond to cooperative policies to effectively resist risk shocks and stabilize farmers’ income level and family welfare.     

农民专业合作社收益分配机制及影响因素分析

收益分配制度是确定农民专业合作社和社员关系的关键因素。从决策机制、股权结构、合作社文化等方面分析我国不同地区农民专业合作经济组织收益分配制度,发现多种因素影响我国农民专业合作社分配制度,应从完善合作社社员大会制度、规范合作社的股权结构、完善分配制度等方面建立和完善农民专业合作社盈余分配机制,以实现合作社社会公平和经济效率的双重属性,促进农民专业合作社持续、健康发展。     

Impact of cooperative membership on market performance of Nepali goat farmers

In developing countries, agricultural cooperatives are increasingly used by farmers as a mechanism to gain market power in input and output markets. To assess the impact of cooperative membership on market channel selection and pricing outcomes, we conducted a survey of 661 Nepali goat farmers in 2019–20 and applied an endogenous switching probit model to analyze the data. Our findings indicate that cooperative membership had a significant and positive influence on farmers choosing cooperatives as their market channel. Additionally, farmers who sold their goats through cooperatives received significantly higher prices than those who sold through local markets or to goat collectors. We also observed that farmers who had access to price information were able to obtain better prices for their goats. Overall, our study highlights the potential benefits of promoting cooperative membership and marketing through cooperatives, as these efforts can help farmers improve the returns on their agricultural investments.     

Farmers’ organizations and sustainable development: An introduction

This special issue features 14 new research papers investigating the role of farmers’ organizations (e.g., collective action, self-help groups, producer companies/organizations, and cooperatives) in supporting sustainable development. The key findings include: (1) farmer groups and cooperatives promote farmers’ adoption of good farm management practices, new agricultural technologies and sustainable farming practices, although not substantially improving farm yield; (2) outsourcing services provided by agricultural cooperatives help to increase the technical efficiency of crop production; (3) cooperative membership enhances members’ bargaining power and enables them to sell their products at higher prices; (4) cooperatives motivate rural laborers to work in off-farm sectors, while self-help groups empower rural women in decision-making; (5) internet use improves agricultural cooperatives’ economic, social, and innovative performances; (6) direct administrative intervention supporting cooperative development may lead to the emergence of shell cooperatives; (7) participation in forest farmer organizations enables wood value chain upgrading; (8) increasing the cooperative size in terms of income, equity, and assets increases the profitability of savings and credit cooperatives; and (9) creating cross-border cooperation between cooperatives generates benefits for all parties involved. These findings can inspire the design of policies aimed to support farmers’ organizations in achieving sustainable development goals.     

DRIVERS OF PRO‐ACTIVE MEMBER PARTICIPATION IN AGRICULTURAL COOPERATIVES: EVIDENCE FROM BRAZIL

Effective governance of cooperatives depends on the pro‐active participation of members in the governance. However, it is commonly argued that, especially in cooperatives with high heterogeneity of membership, additional decision‐making and influencing costs could emerge if members who participate in the governance do so to obtain direct or indirect economic benefits at the individual farm level. The objective of this paper is to assess whether or not farmers’ economic motivations for continued association are relevant drivers of pro‐active participation. Data originate from 148 farmers from a large agricultural cooperative in Brazil. The results suggest that economic motivations for continued association are drivers of participation in the General Assembly, but not of ‘pro‐active’ participation in boards and committees.     

False prosperity: Rethinking government support for farmers’ cooperatives in China

The rapid development of farmers’ cooperatives in rural China cannot be separated from government support. To ensure the growth of farmers’ cooperatives, the Chinese government uses it as a key performance indicator for its local institutions. Superficially, rural China's cooperative population and membership size witnessed rapid growth during the first decade after the Farmers’ Specialized Cooperatives Law was enacted in 2007; however, such government intervention also leads to non-standard phenomena due to market distortion. Using nationally representative survey data from 504 cooperatives in Jiangsu, Jilin, and Sichuan provinces, this paper provides a reliable estimate of the “shell cooperative” rate around 2014. The empirical study sheds further light on the role of government during the period of rapid but chaotic growth by a subset containing 241 marketing cooperatives. Results show that direct administrative intervention leads to the emergence of many shell cooperatives (approximately 37%). Further study also confirms that task-oriented policy support is only positively associated with the nominal coverage ratio but has no significant relationship with cooperatives’ function. This study provides new insights into the formation of shell cooperatives and suggests that direct administrative intervention may not be a good strategy for promoting the sustainable development of farmers’ cooperatives.     

Does agricultural cooperative membership influence off-farm work decisions of farm couples?

Membership in agricultural cooperatives may influence intra-household decisions regarding the division of household labor. However, the linkages between cooperative membership and labor allocation remain unexplored. To fill this gap, we examine the impact of cooperative membership on off-farm work decisions of couples engaged in farming, using data collected from 595 banana farmers in China. The recursive bivariate probit model and endogenous-treatment Poisson regression model are employed to address the self-selection bias inherent in cooperative membership. The results show that cooperative membership increases the probability of participating in off-farm work by 38% for husbands and 31% for wives. Having large households reduces the probability of husbands but increases that of wives working off-farm. Cooperative membership is also associated with more time spent on off-farm work and higher earnings for both husbands and wives. Our findings point to the potential of agricultural cooperatives to increase farm couples’ off-farm employment, thus increasing household income and quality of life.     

COLLECTIVE ACTION AND ASPIRATIONS: THE IMPACT OF COOPERATIVES ON ETHIOPIAN COFFEE FARMERS’ ASPIRATIONS

Aspirations motivate behaviours, serve to mobilize and direct energy into actions, and are regarded as important determinants of success. Given the importance of aspirations and their formation in social interaction, the objective of this article is to evaluate if cooperative membership can have effects on members' aspiration levels. Face‐to‐face interviews were conducted with 305 Ethiopian coffee farmers on their aspired levels in five dimensions of their lives. Results, using a propensity score matching technique, show that membership in cooperatives significantly improves the aspiration levels of the members. The article emphasizes the utilization of this hidden but important benefit of cooperatives.     

COMMUNITY AND COOPERATION: THE EVOLUTION OF COOPERATIVES TOWARDS NEW MODELS OF CITIZENS' DEMOCRATIC PARTICIPATION IN PUBLIC SERVICES PROVISION

The community cooperatives that are spreading today in many parts of the world are the arrival point of an evolutionary process that has seen the progressive shift of cooperatives’ focus from specific social and professional groups to society as a whole. This evolution is marked by two changes. The first was at the turn of the 19th century when there made their appearance the first community cooperatives which catered to the needs of a whole community. Among them were electric cooperatives, cooperative banks and some kinds of agricultural cooperatives. A further development relevant to the evolution of community cooperatives occurred towards the end of the last century with the enlargement of cooperatives’ aims to embrace society's benefit. From this process there emerge in total four categories of cooperatives which taken together constitute a complete classification of the cooperative universe. New community cooperatives are the off‐springs of the old ones but the picture is rather confused. The term itself is relatively new and similar institutions are named differently at different times. Moreover, though having a few basic features in common, they differ much from one another and from the old ones. To take care of this we elaborate a concept of community cooperative consistent with its evolution and the classification of cooperatives we have identified. Basic elements of the concept are community goods, territory and citizenship, which are discussed extensively with reference to factual cases. We then discuss in what way new community cooperatives differ from old ones. The paper closes with a discussion of their future prospects.     

粮食主产区农户加入农业合作组织意愿的实证分析——以江西省为例

加入农业合作组织将在一定程度上减少农户生产经营活动的盲目性,提升其生产经营活动的组织性和计划性,进而增强分散农户抗衡市场风险的能力。以江西省289个农户为研究对象,实证分析了粮食主产区农户加入农业合作组织的意愿,结果表明:30.8%的农户愿意加入农业合作组织,显著影响农户加入农业合作组织意愿的因素是户主年龄、户主文化程度、户主对风险的偏好、家庭种植面积、获取交易信息难易程度、交易过程顺畅程度以及是否参加过农业技术培训。     

UNDERSTANDING MEMBER CHARACTERISTICS AND COOPERATIVE PRICE EFFECTS: THE CASE OF THE ARGENTINEAN DAIRY SECTOR

Since the 1990s, Argentinean dairy‐processing cooperatives have lost considerable amounts of members and market share. We analyse their current role by investigating the characteristics of farmers who continue delivering to them and price differentials between cooperatives and investor‐oriented firms (IOFs). A probit regression model applied to 917 farmers suggests that cooperative farmers are more disadvantaged than farmers delivering to IOFs in terms of education, farm size and productive technology. Moreover, t‐tests applied to data representing 70 per cent of national volume indicate that farmers delivering to cooperatives are between 11 per cent and 29 per cent smaller than those delivering to IOFs, depending on province. A hierarchical multilevel regression model applied to 9,720 transactions among farmers and processors shows that, after controlling for quantity and quality, cooperatives pay lower (3.5%) but more stable prices than IOFs. In a context of rapid structural change, we observe a market in which larger farmers deliver to IOFs and smaller farmers deliver to cooperatives and conclude that, at the expense of paying lower prices, cooperatives may act as buyers of last resort for otherwise disadvantaged farmers.     

试论我国农民专业合作社成员权救济制度的构建

农民专业合作社是我国目前提高农民收入,实现农业专业化、产业化、规模化生产经营,解决"三农"问题,建设社会主义新农村的重要途径。2005年通过的《中华人民共和国农民专业合作社法》为我国农民专业合作社的发展提供了重要的法律保障。但合作社成员权救济制度的缺失,使得不能实质实现对合作社成员权利的保障,同时也制约了农民专业合作社的发展。我国应逐步建立健全农民专业合作社成员权救济制度,保护农民合作社成员合法权益,为我国农民专业合作社的健康发展保驾护航。     

SOCIAL CAPITAL,GOVERNANCE AND PERFORMANCE OF ETHIOPIAN COFFEE COOPERATIVES

ABSTRACT: The performance of agrarian cooperatives strongly depends on the interaction between internal cohesion and external exchange. Empirical assessments of social capital and trust within cooperatives suggest that market involvement could enhance collective action. This relationship may not hold, however, under circumstances of heterogeneous membership and strong state control. We use field data from a comparative sample of 500 coffee farmers belonging to five cooperatives of Sidama Cooperative Union, Ethiopia to outline how differences in economic performance are related to the structure of social networks. We identify clear trade‐offs between bonding and bridging social capital that favour remotely located cooperatives.     

Reflections on Social Economics in a Diverse and Open Economics

Many economists adopt a critical stance on cooperatives. One example is the claim that larger membership in cooperative banks is detrimental to performance. We re-examine this earlier finding by drawing from a richer and broader conceptual framework than used previously and conclude that in recent years, the relationship between membership and performance may be positive. In our empirical analysis, we use new data for Finnish cooperative banks and, compared to earlier work, develop an alternative measure for membership and employ improved estimation methods. A positive relationship between membership and performance in financial cooperatives is consistently found. We discuss our findings in light of an emerging body of theoretical and empirical work on cooperatives, especially for financial cooperatives, and argue that a new view of cooperatives is warranted.     

IMPACT OF AGRICULTURAL COOPERATIVES ON SMALLHOLDERS’ TECHNICAL EFFICIENCY: EMPIRICAL EVIDENCE FROM ETHIOPIA

Using household survey data from Ethiopia, this paper evaluates the impact of agricultural cooperatives on smallholders’ technical efficiency. We used propensity score matching to compare the average difference in technical efficiency between cooperative member farmers and similar independent farmers. The results show that agricultural cooperatives are effective in providing support services that significantly contribute to members’ technical efficiency. These results are found to be insensitive to hidden bias and consistent with the idea that agricultural cooperatives enhance members’ efficiency by easing access to productive inputs and facilitating extension linkages. According to the findings, increased participation in agricultural cooperatives should further enhance efficiency gains among smallholder farmers.     

(Farmer) Producer Companies in India as new generation cooperatives: Case studies of performance and impact from West Bengal,India

One of the innovative alternatives to the traditional cooperative structure has been the new generation cooperatives or cooperative companies, known as producer companies (PCs) in India since the early 2000s. This paper examines the impact of PCs on the member farmer livelihoods, which is not well studied, with the help of member and non-member farmer interview survey in the Indian state of West Bengal. It is found that though the PCs were inclusive of small farmers in their membership, the PC interface with members for farm inputs was not very strong and the output linkage was poor, reaching only a small proportion of member farmers. The Sufal Bangla public supermarket franchise by some PCs was found to make a large difference to the PC performance and its impact on member farmers. The small size of membership in most case study PCs hindered the equity size, leading to working capital and market interface constraints. Therefore, it is important to encourage members to contribute more equity and to reward their output linkage.     

THE RELEVANCE OF THE COOPERATIVE MODEL IN THE FIELD OF RENEWABLE ENERGY

While ‘traditional’ cooperatives operating for a long time in fields such as banking, agriculture, or retail, have received important attention in the cooperative literature, much work still needs to be done to understand why and how cooperatives emerge either in fields in which they have not traditionally been widespread (such as health and care, services, etc.), or in ‘new’ fields or sub‐fields (such as fair trade, microfinance or renewable energy). Research is even more needed insofar as ‘new’ cooperatives tend to differ from traditional ones in several ways, for instance through the involvement of multiple stakeholders (rather than a dominant one such as producers, consumers or workers) or through a stronger orientation towards general interest goals (beyond traditional mutual interest at the basis of most cooperatives). In this article, we analyze the emergence of cooperatives in the field of renewable energy. This emergence has raised a lot of enthusiasm among the supporters of cooperatives and citizen‐based renewable energy as well as questions regarding the viability and the replicability of this model. On the one hand, the assets of the cooperative model enable us to understand why this form has been adopted by citizen groups and has developed, although to varying extents, in many countries. On the other hand, the limits or weaknesses of the model enable us to explain why cooperatives are still a minority in the field of renewable energy and why their development is constrained by several obstacles.     

IMPACT OF COOPERATIVES MEMBERSHIP ON ECONOMY IN EASTERN OROMIA: THE CASE OF HARAMAYA AGRICULTURAL FARMERS’ COOPERATIVE UNION (HAFCU)

This study attempts to analyse the impact of cooperatives on the smallholders’ income, productivity, marketed surplus and saving in East Hararghe Zone of Haramaya District. The study is based on primary cross‐sectional data collected from cooperative member and non‐cooperative member household heads. The propensity score matching (PSM) estimates complemented by a bias correction matching (BCM) and Lewbel instrumental variable (IV) regression estimation shows that cooperatives have a positive impact on smallholders’ income and productivity. The findings have strong policy implications. The rural development of the country should work toward strengthening and expanding the existing rural organizations through training and capacity building programmes. It is important particularly establishing new rural‐based organizations that enable rural households to engage in business activities. Doing that may help reduce poverty and increase smallholders’ income, productivity, and capital accumulation.