Do Farmer Professional Cooperatives Improve Technical Efficiency and Income? Evidence from Small Vegetable Farms in China

Ying Dong,Yueying Mu,David Abler

doi:10.1017/aae.2019.22

Abstract

AbstractChina’s small-scale agricultural producers face many challenges to increasing productivity and efficiency. In recent years, the Chinese government has provided support for farmer professional cooperatives (FPCs) to connect small farms with upstream and downstream processes in the food supply chain. This study combines propensity score matching and sample selection-corrected stochastic production frontier analysis to estimate the impacts of FPC participation by greenhouse vegetable producers on technical efficiency and income. Results indicate that FPCs help participants improve returns to scale and marginal returns to land and labor, increase technical efficiency, and obtain ¥4,460 (18%) greater income per greenhouse than nonparticipants.

Highlights

China’s small-scale agricultural producers face many challenges to increasing productivity and efficiency
These estimated gaps are based on the sample selection stochastic production frontier (SPF) model results in Table 3 and the stochastic metafrontier (SMF) results in Table 4, which in turn are based on the matched samples of farmer professional cooperatives (FPCs) participants and nonparticipants
This study combines propensity score matching (PSM) techniques with a selection-corrected stochastic metafrontier analysis to estimate the effects of participation in FPCs on technical efficiency (TE) and income

Summary

Introduction

China’s small-scale agricultural producers face many challenges to increasing productivity and efficiency. Most small farm households cannot access modern marketing channels because of an inability to meet the required food safety and quality standards (Jia, Huang, and Xu, 2012). In small-scale vegetable production, many farmers have attempted to overcome these challenges by adopting greenhouse production to control growing conditions and thereby improve the quality and quantity of output (Ti, Luo, and Yan, 2015). Greenhouse production is relatively intensive in capital and labor, and endowment constraints can inhibit adoption by small-scale farm households or even limit the technical efficiency and output price because of food retailers’ buyer power (Mugera and Langemeier, 2011; Sheldon, 2017; Wang et al, 2013)

Objectives

Results

Conclusion