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

Ruoyan Zhang and Ru Chen

Annals of Public and Cooperative Economics, 2023, vol. 94, issue 4, 1323-1344

Abstract: 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.

Date: 2023
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