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Measuring the effect of agricultural cooperatives on household income using PSM-DID : a case study of a rice-producing cooperative in China

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  • Hoken, Hisatoshi
  • Su, Qun

Abstract

Agricultural cooperatives in China, known as Farmers' Professional Cooperatives (FPCs), are becoming popular and have been intensely promoted by the Chinese government to improve the economic welfare of small farmers. However, very few studies on Chinese agricultural cooperatives have measured the benefits to farmers who participate in FPCs after controlling for time-invariant attributes of farmers. This paper investigates the treatment effect of participation in a rice-producing cooperative in suburban China using propensity score matching (PSM) and difference-in-differences (DID) method. Estimated results show that no significant difference is observed between participants and non-participants of the cooperative in terms of net income from rice production when controlling for the difference in farmers' rice incomes before the treatment. In addition, there is no significant heterogeneity of the treatment effects between large and small farmers, although the probability of participation in the cooperative is significantly higher when the size of cultivated rice farmland is greater. These results indicate that the benefits of the cooperative appear to be overestimated considering the vigorous policy supports for FPCs from the Chinese government.

Suggested Citation

  • Hoken, Hisatoshi & Su, Qun, 2015. "Measuring the effect of agricultural cooperatives on household income using PSM-DID : a case study of a rice-producing cooperative in China," IDE Discussion Papers 539, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper539
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    Cited by:

    1. Jerzy Michalek & Pavel Ciaian & Jan Pokrivcak, 2018. "The impact of producer organisations on farm performance: A case study of large farms in Slovakia," JRC Research Reports JRC108059, Joint Research Centre.
    2. Idowu James Fasakin & Adebayo Isaiah Ogunniyi & Lateef Olalekan Bello & Djana Mignouna & Razack Adeoti & Zoumana Bamba & Tahirou Abdoulaye & Bola Amoke Awotide, 2022. "Impact of Intensive Youth Participation in Agriculture on Rural Households’ Revenue: Evidence from Rice Farming Households in Nigeria," Agriculture, MDPI, vol. 12(5), pages 1-17, April.
    3. Michalek, Jerzy & Ciaian, Pavel & Pokrivcak, Jan, 2018. "The impact of producer organizations on farm performance: The case study of large farms from Slovakia☆," Food Policy, Elsevier, vol. 75(C), pages 80-92.
    4. Adjin, K. Christophe & Goundan, Anatole & Henning, Christian H. C. A. & Sarr, Saer, 2020. "Estimating the impact of agricultural cooperatives in Senegal: Propensity score matching and endogenous switching regression analysis," Working Papers of Agricultural Policy WP2020-10, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.
    5. Adjin, K. Christophe & Henning, Christian H. C. A., 2019. "Farmers organizations and food availability in Senegal: An impact analysis using a spatial econometrics approach," Working Papers of Agricultural Policy WP2019-07, University of Kiel, Department of Agricultural Economics, Chair of Agricultural Policy.

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    More about this item

    Keywords

    China; Agricultural Cooperative; Agricultural Economies; Farm Household; Treatment Effect; PSM; DID;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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