Does cooperative membership stabilize farm income volatility? Evidence from the pig sector in China
China Agricultural Economic Review
ISSN: 1756-137X
Article publication date: 8 August 2023
Issue publication date: 29 August 2023
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.
Keywords
Acknowledgements
The authors would like to acknowledge funding from the National Natural Science Foundation of China (72161147001, 71861147002), National Office for Philosophy and Social Sciences (21&ZD091, 21&ZD092), the Fundamental Research Funds for the Central Universities (S20230068), the Ministry of Education of China (22JJD790077), and Michigan State University's AgBioResearch (MICL02608). The authors are also grateful for the constructive comments/suggestions from Editor Junfei Bai and two anonymous reviewers. The authors would also like to acknowledge the opportunity to present an early version of the paper to the Asian Development Bank Institute (ADBI) Virtual Conference on “Farmers' Organizations and Sustainable Development” held on September 7-9, 2022. The authors are particularly grateful for the valuable comments from meeting participants for their valuable comments and suggestions on how to improve the paper.
Citation
Ji, C., Zhuo, N. and Jin, S. (2023), "Does cooperative membership stabilize farm income volatility? Evidence from the pig sector in China", China Agricultural Economic Review, Vol. 15 No. 3, pp. 623-641. https://doi.org/10.1108/CAER-09-2022-0219
Publisher
:Emerald Publishing Limited
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