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

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  • Ito, Junichi
  • Bao, Zongshun
  • Su, Qun
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    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.

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    Bibliographic Info

    Article provided by Elsevier in its journal Food Policy.

    Volume (Year): 37 (2012)
    Issue (Month): 6 ()
    Pages: 700-709

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    Handle: RePEc:eee:jfpoli:v:37:y:2012:i:6:p:700-709

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    Web page: http://www.elsevier.com/locate/foodpol

    Related research

    Keywords: Agricultural cooperatives; Contract farming; Treatment effect; China;

    References

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    Cited by:
    1. Felix Meier zu Selhausen & Erik Stam, 2013. "Husbands and Wives. The powers and perils of participation in a microfinance cooperative for female entrepreneurs," Working Papers 13-10, Utrecht School of Economics.

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