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Contractual arrangements between farmer cooperatives and buyers in China


  • Jia, Xiangping
  • Huang, Jikun


The agrofood market in China is dominated by spot market exchanges of small farmers and various small traders, with only minor penetration of the modern supply chain at the farmgate. The emerging Farmer Professional Cooperatives (FPCs) are expected to facilitate vertical coordination. The overall goal of this study is to investigate the contractual arrangements between the FPCs and the buyers. Based on a national representative survey of 157 FPCs in China, this study shows that 32% of FPCs introduced written contracts in the primary marketing channel. Contracts are more likely to be adopted in the livestock sector and are positively related to the scale of production. While branding promotes contracts between FPCs and buyers, public certification of quality and food safety often substitutes for contracts. Furthermore, the membership heterogeneity of FPCs affects an FPC's decision to use contractual arrangements with the buyer.

Suggested Citation

  • Jia, Xiangping & Huang, Jikun, 2011. "Contractual arrangements between farmer cooperatives and buyers in China," Food Policy, Elsevier, vol. 36(5), pages 655-665, October.
  • Handle: RePEc:eee:jfpoli:v:36:y:2011:i:5:p:655-665

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    References listed on IDEAS

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    2. Alston, Julian M. & Sumner, Daniel A. & Vosti, Stephen A., 2008. "Farm subsidies and obesity in the United States: National evidence and international comparisons," Food Policy, Elsevier, vol. 33(6), pages 470-479, December.
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    Cited by:

    1. 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).
    2. Zhou, Jie-hong & Yan, Zhen & Li, Kai, 2015. "Understanding farmer cooperatives’ self-inspection behavior to guarantee agri-product safety in China," 2015 Conference, August 9-14, 2015, Milan, Italy 211860, International Association of Agricultural Economists.
    3. Michelson, Hope & Boucher, Stephen R. & Bai, Junfei & Jia, Xiangping & Huang, Jikun & Chen, Xinzhe, 2013. "Supermarket Supply Chains with Chinese Characteristics: The Case of Walmart's Direct Farms," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150441, Agricultural and Applied Economics Association.
    4. Hoken, Hisatoshi, 2016. "Participation in farmer's cooperatives and its effects on agricultural incomes : evidence from vegetable-producing areas in China," IDE Discussion Papers 578, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. Chagwiza, Clarietta & Muradian, Roldan & Ruben, Ruerd, 2016. "Cooperative membership and dairy performance among smallholders in Ethiopia," Food Policy, Elsevier, vol. 59(C), pages 165-173.
    6. Li, Xiaokang & Guo, Hongdong & Li, Lin, 2016. "Contract Farming in China: Perspectives of Smallholders in Vegetable Production," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235573, Agricultural and Applied Economics Association.
    7. Ito, Junichi & Bao, Zongshun & Su, Qun, 2012. "Distributional effects of agricultural cooperatives in China: Exclusion of smallholders and potential gains on participation," Food Policy, Elsevier, vol. 37(6), pages 700-709.
    8. Zhang, Lei & Zhu, Xueqin & Heerink, Nico & Shi, Xiaoping, 2014. "Does output market development affect irrigation water institutions? Insights from a case study in northern China," Agricultural Water Management, Elsevier, vol. 131(C), pages 70-78.
    9. Yang, Huan & Klerkx, Laurens & Leeuwis, Cees, 2014. "Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China," Agricultural Systems, Elsevier, vol. 127(C), pages 115-125.
    10. Trebbin, Anika, 2014. "Linking small farmers to modern retail through producer organizations – Experiences with producer companies in India," Food Policy, Elsevier, vol. 45(C), pages 35-44.
    11. Jespersen, Karen Sau & Kelling, Ingrid & Ponte, Stefano & Kruijssen, Froukje, 2014. "What shapes food value chains? Lessons from aquaculture in Asia," Food Policy, Elsevier, vol. 49(P1), pages 228-240.
    12. Lijia, Wang & Xuexi, Huo, 2014. "Grower's Selling Behavior: Transaction Cost Comparison Analysis," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 15(2), June.
    13. González-Moralejo, Silvia Andrés & Muñoz, Pablo Muñoz & Miquel, Juan Francisco López, 2015. "Firm Size, Contractual Problems and Organizational Decision-Making: Logistics for Perishable Goods," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 18(4).
    14. Sultan, Tursinbek & Wolz, Axel, 2012. "Agricultural Cooperative Development in China and Vietnam since Decollectivization: A Multi-Stakeholder Approach," Journal of Rural Cooperation, Hebrew University, Center for Agricultural Economic Research, vol. 40(2).


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