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

  • Ito, Junichi
  • Bao, Zongshun
  • Su, Qun
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    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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    File URL: http://www.sciencedirect.com/science/article/pii/S0306919212000838
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    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
    Contact details of provider: Web page: http://www.elsevier.com/locate/foodpol

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