The impact of cooperative participation on income: the case of vegetable production in Vietnam

Purpose - The demand for clean vegetables has rapidly increased, many farmers gradually turn to vegetable cultivation to increase income; therefore, agricultural cooperative mobilized farmers group to facilitate them access to technical training and enhance compliance with the Vietnamese Good Agricultural Practices (VietGAP) standards. The purpose of this paper is to evaluate the impacts of the participation on farmer’s income as well as the major factors that affect the participation in cooperatives by the vegetable farmers in Vietnam. Design/methodology/approach - The study used primary data collected from vegetable farmers in Vietnam. This study utilized propensity score matching to avoid initial selection bias. The differences between participants and nonparticipants will be adjusted by matching each membership individual to a nonmember based on similar observable characteristics by summarizing the conditional probability of a member given pretreatment characteristics. Findings - This study demonstrates that participation in cooperatives is significantly affected by ethnicity, age of household head, labor involving vegetable production and extension service access. The results of this study also confirm that agricultural cooperatives have positive effects on member farmers to enhance income and that participants – on average – have a higher income than nonparticipants. Research limitations/implications - The method cannot rule out the possibility of selection bias due to unobserved differences between participants and even an appropriate comparison group. Originality/value - This study contributes to an improved understanding about impacts of cooperatives on farmers’ income in developing and emerging economies. Moreover, research also upgrades knowledge regarding the effectiveness of agricultural cooperatives in Vietnam, as well as guides policymakers in supporting the cooperatives in expanding the market and other necessary changes.