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Article
Publication date: 8 August 2023

Chen Ji, Ni Zhuo and Songqing Jin

Farm income in the agricultural sector is susceptible to natural and market risks. A large body of literature has studied the effects of cooperative membership on household…

Abstract

Purpose

Farm income in the agricultural sector is susceptible to natural and market risks. A large body of literature has studied the effects of cooperative membership on household welfare, technical efficiency, productivity and production behavior, yet little has been known about the impact of cooperative membership on farm income volatility. This paper aims to fill this research gap by investigating the relationship between cooperative membership and farm income volatility of Chinese pig farmers and drawing policy implications.

Design/methodology/approach

This paper examines the effect of cooperative membership on farm income volatility, using data from a two-round survey of pig farmers in China. The authors employ an endogenous switching regression model to address the selection bias issues associated with unobserved factors simultaneously affecting farmers' participation in agricultural cooperatives and income earning activities.

Findings

Using household panel from a two-round survey of 193 pig farmers in China, this analysis highlights two key findings: (1) agricultural cooperative membership has significant and positive effect on farm income stability and (2) the impact of cooperative membership on farm income stability varies with production scale.

Originality/value

This research makes two contributions to the literature. First, this study contributes to the scant literature exploring the relationship between agricultural cooperatives and farm income stability. Second, to the best of the authors' knowledge, this is the first study that explores such relationship in a livestock sector. The pig sector in China and around the developing world has been increasingly challenged by multifaceted risks (e.g. price fluctuations, epidemic diseases, environmental regulations), and understanding the role of agricultural cooperatives in farm income stability of pig farmers is of great practical and policy significance.

Details

China Agricultural Economic Review, vol. 15 no. 3
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 31 August 2021

Samuel Ahado, Jiří Hejkrlík, Anudari Enkhtur, Tserendavaa Tseren and Tomáš Ratinger

The purpose of this paper is to examine the impact of agricultural cooperative membership on potato production and technical efficiency.

Abstract

Purpose

The purpose of this paper is to examine the impact of agricultural cooperative membership on potato production and technical efficiency.

Design/methodology/approach

A combination of propensity score matching technique and sample selection stochastic frontier framework that addresses potential selection bias due to observable and unobservable attributes is used to estimate the effect of participation between cooperative members and non-members. Using a stochastic meta-frontier approach, the technical efficiency of farmers was estimated and compared.

Findings

The empirical results show that the effect of participation in agricultural cooperatives is associated with increased yield and technical efficiency. A comparison of group-specific frontiers indicates that cooperative members perform better than non-members. Cooperative membership decisions is significantly associated with household and farm characteristics (e.g. education, participation in off-farm work, total farmland, distance to market and geographic location).

Practical implications

The findings of this study demonstrate that cooperative organisations can be an important tool to enhance the productivity and efficiency of smallholder farmers. Successful cooperative models together with training programs designed to enlighten farmers on the importance and tangible benefits of collective action should be used to enlarge participation in cooperative organisations. In addition, governments and development agencies should implement targeted investment and capacity building programs related to irrigation management, gender-sensitive awareness and development of the internal institutional mechanisms in cooperatives for the transfer of knowledge and mutual learning so that all members benefit from cooperatives.

Originality/value

Despite the pervasive evidence of the impact of cooperatives on productivity and technical efficiency in the Asian region, this study is probably the first attempt in the crop sector in Mongolia. It provides a rigorous empirical analysis of the impact of agricultural cooperative membership on potato production and technical efficiency through a counterfactual design.

Details

China Agricultural Economic Review, vol. 13 no. 4
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 5 February 2018

Zuhui Huang and Qiao Liang

During the past four decades, agriculture and rural development in China has scored a great progress. Organization institution in agriculture is one of the domains with drastic…

1812

Abstract

Purpose

During the past four decades, agriculture and rural development in China has scored a great progress. Organization institution in agriculture is one of the domains with drastic innovations. The purpose of this paper is to map the emergence and evolution of various agricultural organizations in China since 1978. Development status and the trend of agricultural organization system are analyzed. Further, the role of farmer cooperatives is discussed.

Design/methodology/approach

Data used in the paper are mainly from statistical yearbooks and documents published by the government including Ministry of Agriculture and Bureau of Industry and Commercial. Both descriptive and deductive analyses are adopted to achieve different analytical purposes.

Findings

The vast small-farm sector, co-existence of various types of organizations, and innovation of other organizations will continue and sustain for a long-time period in China. Despite the fast development of modern farmers and various organizations, it is important that traditional farmers participate effectively in modern agriculture. Farmers act collectively via a cooperative in a desirable way, which determines the central position of farmer cooperatives in the agricultural organization system.

Research limitations/implications

This paper is a qualitative analysis on agricultural organizations in China, yet no quantitative estimation regarding the comparison of various organizations is conducted due to insufficient data.

Originality/value

This paper fills the gap of a comprehensive review of the emergence, development status, and trend of agricultural organizations in China.

Details

China Agricultural Economic Review, vol. 10 no. 1
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 28 May 2021

Ying Yang, Mai Ha Pham, Biao Yang, Jun Wei Sun and Phuong Nguyen Thu Tran

While various aspects of the vegetable supply chain (SC) have been increasingly studied, most studies tend to investigate the downstream part of the SC in terms of customer demand…

1013

Abstract

Purpose

While various aspects of the vegetable supply chain (SC) have been increasingly studied, most studies tend to investigate the downstream part of the SC in terms of customer demand and product quality. Relatively fewer studies have focused on upstream suppliers/farmers. This study aims to understand upstream farmers’ positions in different types of vegetable SCs and identify ways of enhancing sustainable vegetable SC collaboration.

Design/methodology/approach

This study is based on an in-depth case study of a cooperative SC in Vietnam from the perspectives of both the cooperative and its farmers.

Findings

The study found that cooperative SCs are the most appropriate for Vietnamese farmers. It also identified the key activities needed to engage farmers with cooperative SCs and the mechanisms that the cooperative needs to develop. Cooperative SCs can be enhanced only when farmers are motivated to engage in SC activities and when the cooperative implements a robust management mechanism.

Originality/value

This study provides new, insightful results on how to engage with small fragmented farmers for SC collaboration and how to enhance the roles of cooperative SCs in the vegetable industry in Vietnam. It also provides information for policymakers to support sustainable vegetable SC development and maintain its sustainability.

Details

Supply Chain Management: An International Journal, vol. 27 no. 1
Type: Research Article
ISSN: 1359-8546

Keywords

Article
Publication date: 27 July 2021

Cinthya Mônica da Silva Zanuzzi, Cristian Rogério Foguesatto, Graciele Tonial, Dieisson Pivoto and Paulo Maurício Selig

Driven by scientific and technological intensification, Brazilian agribusinesses are among the main food producers and exporters worldwide. Knowledge management contributes to the…

Abstract

Purpose

Driven by scientific and technological intensification, Brazilian agribusinesses are among the main food producers and exporters worldwide. Knowledge management contributes to the development of agribusinesses. The objective of this study is to analyze knowledge management practices in the supply chain of broilers at the level of farmers and compare the differences between farmers who are members of cooperatives, and those who are suppliers of firms.

Design/methodology/approach

Using data from a sample of broiler farmers (n = 240, where 80 respondents are associated with cooperatives) from Brazil, descriptive statistics were used to measure the four knowledge management dimensions (leadership, people, process and technology). The Mann–Whitney test was performed to verify the difference in the adoption of knowledge management practices between farmers who are members of cooperatives, and those who are suppliers of firms.

Findings

The results showed significant differences between the analyzed groups of broiler farmers that are members of an agricultural cooperative and suppliers of firms. Farmers who supply firms adopt knowledge management practices with greater intensity. They are also more technified and have a larger scale of production.

Research limitations/implications

The study was conducted in a single agribusiness chain. Future studies may look at another method of knowledge management assessment to see if the results will be similar.

Practical implications

The results can contribute to the development of programs and policies, incorporating knowledge management into agribusiness as a competitive strategy.

Originality/value

While knowledge management is a widely studied topic, there has been little focus on this subject with regard to agribusiness. Empirical findings of an important agribusiness supply chain are provided and show the differences in knowledge management perceptions between farmers who are members of cooperatives and those who are suppliers of firms.

Details

International Journal of Social Economics, vol. 48 no. 11
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 30 July 2020

Andrew Gerard, Maria Claudia Lopez, Daniel C. Clay and David L. Ortega

This study aims to improve our understanding of side selling in farmer cooperatives. Cooperative member side selling, in which farmers divert produce from cooperatives to…

Abstract

Purpose

This study aims to improve our understanding of side selling in farmer cooperatives. Cooperative member side selling, in which farmers divert produce from cooperatives to competitors, threatens coffee cooperatives. This is a problem in Burundi, where many households earn income from coffee and cooperatives serve a collective action function.

Design/methodology/approach

Using data from a survey of Burundian coffee farmers, we assess the determinants of two types of cooperative member side-selling behavior: selling to both cooperative and non-cooperative buyers and selling solely to non-cooperative buyers.

Findings

Farmers who sell to both cooperative and non-cooperative buyers are more likely to be male household heads, be more invested in coffee and have larger farms than non-side sellers, among other characteristics. Farmers who only sell to non-cooperative buyers are poorer and less invested in coffee than non-side sellers.

Research limitations/implications

Additional research is needed to better understand why side-selling behavior differs between groups and to better understand how household head gender influences side selling. In addition, this study lacks qualitative data supporting quantitative findings. Future research should include qualitative methods to better understand motivations for side-selling behavior.

Originality/value

The study provides important information on what influences cooperative member side selling and focuses on specific types of side-selling behavior that have been largely overlooked. The study focuses on the role of household head gender in side selling, which is important, given the centrality of women to African agriculture.

Details

Journal of Agribusiness in Developing and Emerging Economies, vol. 11 no. 5
Type: Research Article
ISSN: 2044-0839

Keywords

Article
Publication date: 18 April 2023

Jasper Grashuis

This study analyzes the long-term effect of merger and acquisition (M&A) activity on the profitability, efficiency and liquidity of the largest 500 farmer cooperatives in the…

Abstract

Purpose

This study analyzes the long-term effect of merger and acquisition (M&A) activity on the profitability, efficiency and liquidity of the largest 500 farmer cooperatives in the United States.

Design/methodology/approach

Secondary data from the U.S. Department of Agriculture are complemented with primary data collected from print media publications about M&A activity by US farmer cooperatives. The analysis is based on group comparisons of means and distributions to study the effect of M&A activity on financial performance.

Findings

Farmer cooperatives with M&A activity generally have lower profitability, efficiency and liquidity than farmer cooperatives without M&A activity, both at the time of the merger or acquisition as well as afterward. Marketing cooperatives in particular perform worse following M&As. Also, the post-merger performance of farmer cooperatives with M&A activity is not affected by the profitability, efficiency or liquidity of the target.

Originality/value

Research on the post-merger performance of farmer cooperatives is both scarce and dated. This study analyzes the effect of M&A activity for a relatively large sample and a relatively long time period (2005–2020).

Details

Agricultural Finance Review, vol. 83 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 29 April 2014

Ying Zhang and Zu Hui Huang

The purpose of this paper is to investigate risks faced by farmer cooperatives in China, using farmer cooperatives in Zhejiang province as a case. Specifically, the authors…

Abstract

Purpose

The purpose of this paper is to investigate risks faced by farmer cooperatives in China, using farmer cooperatives in Zhejiang province as a case. Specifically, the authors identify risks inherent in two primary types of farmer cooperatives in China (traditional and modern ones) when the external environment changes, the cooperative size expands and heterogeneity in membership widens.

Design/methodology/approach

The authors assume that the “uncertainty of the external environment” and the “deviation of organisational adaptation” constitute the two dynamic factors that generated risks for farmer cooperatives. A survey of 158 farmer cooperatives is obtained in Zhejiang province in 2010, and factor analysis is employed to identify the risks and their critical degrees of traditional and modern cooperatives.

Findings

The results indicate that two types of cooperatives in China face drastically different sets of risks. Traditional cooperatives face larger competitive and human resources risks, whereas modern cooperatives face larger decision-making and behavioural risks. Product market risk, macroeconomic policy risk and financial risk are common critical risks faced by both types of cooperatives.

Originality/value

In this paper, risks in China's farmer cooperatives were empirically studied and systematically discussed. The paper offers a typology to identify risks inherent in two primary types of farmer cooperatives in China (traditional and modern ones) according to property rights arrangements and governance structure.

Details

China Agricultural Economic Review, vol. 6 no. 2
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 18 October 2021

Gerald Mashange and Brian C. Briggeman

The purpose of this paper is to examine the financial condition and ability of farmer cooperatives to withstand significant increases in bad debt expense.

Abstract

Purpose

The purpose of this paper is to examine the financial condition and ability of farmer cooperatives to withstand significant increases in bad debt expense.

Design/methodology/approach

A unique data set of farmer cooperative financial statements that spans from 1996 to 2019 is used to examine the changes in profitability, solvency, liquidity and accounts receivable risk. Also, a deterministic stress test model is designed to shock bad debt expense and the resulting write-off of accounts receivable for farmer cooperatives. The stress test provides insights to the resiliency of farmer cooperatives.

Findings

Results find that farmer cooperatives are in a strong financial position, which has improved over time. The majority of farmer cooperatives are able to absorb a substantial increase in bad debt expense because of their sizable, retained earnings position. However, cooperatives that have significant profitability challenges do experience much larger losses, especially mixed farmer cooperatives (roughly equally amounts of grain and farm supply sales) and large cooperatives with more than $500 million in sales.

Practical implications

The stress test results suggest farmer cooperative managers and boards of directors could re-examine their credit policies and consider extending additional credit. Also, cooperatives should consider monitoring and identifying an optimal accounts receivable to retained earnings ratio, which is similar to how banks examine their tier 1 capital ratios.

Originality/value

The value of this study is having data that allows for the examination of the financial condition of farmer cooperatives over time. Also, having current data means the accounts receivable stress test results are more relevant and timelier. This is important because these accounts receivable are primarily tied to crop input supplies, and farmer cooperatives are a significant market participant in the crop input supply market.

Details

Agricultural Finance Review, vol. 82 no. 2
Type: Research Article
ISSN: 0002-1466

Keywords

Article
Publication date: 19 November 2018

Aries Susanty, Arfan Bakhtiar, Nia Budi Puspitasari and Della Mustika

The purpose of this paper is to measure and evaluate the performance of the relationships between farmers, dairy cooperatives and industrial milk processors.

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Abstract

Purpose

The purpose of this paper is to measure and evaluate the performance of the relationships between farmers, dairy cooperatives and industrial milk processors.

Design/methodology/approach

Data used in this study were primary data collected through personal interviews and closed questionnaires with 1–5 Likert scale. The sample consisted of the representative of the management of 12 dairy cooperatives located in Central Java Province, representative of the management of 12 dairy cooperatives located in West Java Province and some farmers who are members of those dairy cooperatives. This study uses balanced supply chain management scorecard for measuring the performance of dairy supply chain, importance-performance analysis (IPA) for identifying the indicators that are most in need of improvement, and strength, weakness, opportunity and threat (SWOT) analysis for formulating strategic planning.

Findings

The results of balanced supply chain management scorecard combined with IPA analysis showed that the performance relationship between farmers, dairy cooperatives and industrial milk processors in West Java Province is slightly better than that in Central Java Province. It can be seen from the average value of the score of indicator, the category of each indicator and the category of the performance index of each relationship. The major weakness of the relationship between dairy farmers, cooperatives and industrial milk processors in Central Java Province lies in the different perspective (no perspective is dominant), whereas that in West Java Province is dominated by the perspective of the customer. On the other hand, the major strength of the relationship in Central Java Province is dominated by the perspective of the customer, whereas that in West Java Province is dominated by the perspective of learning and growth.

Research limitations/implications

The limitation of this study is related to the number of the dairy cooperatives as the sample and the type of scale used to measure the performance of the relationships between farmers, dairy cooperatives and individual milk processors. So, the future research may replicate this study by surveying all the dairy cooperatives in Central Java and West Java Provinces. It may also enhance the measurement of the performance of the relationships by using a direct measure of each indicator in each perspective, rather than recording the management of dairy cooperative perceptions.

Practical implications

This research provides essential insights for the management of dairy cooperative in the context of strategic planning development. The research reveals that there is a different strategic planning for improving the performance of the relationship between dairy farmers, cooperatives and industrial milk processors in each province. It depends on the major weakness and strength of the relationships, and also, opportunity and threat faced by the dairy industry. One important thing, the management of dairy cooperative in both provinces should have strategic planning related to the use of machine milking by farmers to improve the milk quality.

Social implications

The research revealed that strategic planning could be built after analyzing the internal and external conditions carefully. It may encourage more dairy cooperatives to measure and analyze the internal and external conditions at the bottom of strategic planning of their business.

Originality/value

Although this research only used the balanced supply chain management scorecard and IPA analysis for measuring the performance, and SWOT analysis in formulating the strategic planning for improving the current performance, it will make a difference. First, instead of measuring the performance of dairy cooperatives, this research measured the performance of the relationships between dairy farmers, cooperatives and industrial milk processors. This way, the dairy cooperatives were only sources of data collection. Second, the investigation was quite complicated since the objects of the research were represented by the relationships between farmers, dairy cooperatives and industrial milk processors in Central Java Province and West Java Province.

Details

International Journal of Productivity and Performance Management, vol. 67 no. 9
Type: Research Article
ISSN: 1741-0401

Keywords

1 – 10 of over 4000