Distributional effects of agricultural cooperatives in China: Exclusion of smallholders and potential gains on participation

Junichi Ito, Zongshun Bao and Qun Su

Food Policy, 2012, vol. 37, issue 6, 700-709

Abstract: This paper examines the treatment effects of the agricultural cooperative and publicly funded extension services on individual household economy, using data collected by the author from watermelon-producing farm households in rural Nanjing. The cooperative addressed in this study restricts the participation of small-scale farmers, implying that selection into the program must be taken into consideration for an accurate assessment of the treatment effect. The econometric analysis revealed that government extension services have a modest effect on farm income. In contrast, the treatment effect of the agricultural cooperative is robust and substantially large, accounting for nearly 70% of the pre-matching difference. This suggests that the agricultural cooperative system is an important avenue for farmers to improve their economic status. The treatment effect of the agricultural cooperative is highly heterogeneous; the economic benefits arising from the cooperative are significant only for small-scale farms. We can argue that a coexistence of smallholder exclusion and the treatment effect in favor of small-scale farms poses serious challenges to pro-poor agricultural growth in China.

Keywords: Agricultural cooperatives; Contract farming; Treatment effect; China (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (106)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfpoli:v:37:y:2012:i:6:p:700-709

DOI: 10.1016/j.foodpol.2012.07.009

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