Does Service Utilization Improve Members’ Welfare? Evidence from Citrus Cooperatives in China

Abstract

Farmers’ professional cooperatives (hereinafter referred to as “cooperatives”) are an important carrier for small farmers to organically connect to the big market. Under the background of frequent phenomena such as generalization of cooperatives, cooperative alienation, empty shelled cooperatives and involution of cooperatives in China, whether cooperatives can improve members’ welfare has attracted the attention of all walks of life. Service is the essential attribute of cooperatives, and the key to the functioning of cooperatives is the services utilization by members (hereinafter referred to as “service utilization”). Therefore, examining the impact of service utilization on members’ welfare has important theoretical and practical significance, which helps to scientifically evaluate of the current value of cooperatives in China and then objectively respond to questions about the development of cooperatives. Thus, this study takes the micro-survey data of 74 citrus cooperatives and 524 citrus members in Citrus County, Sichuan Province, China as examples, and uses the endogenous switching model to empirically analyze the impact of service utilization on members’ welfare. The results show that the level of service utilization is not high, and only half of the members use cooperative services. However, service utilization can significantly improve members’ welfare. Specifically, the average treatment effect of service utilization on citrus yields, net returns and household income is respectively 285.446 kg/mu, 1290 yuan/mu and 4980 yuan/person. Simultaneously, service utilization can increase citrus yields, net returns and household income by 13.49%, 18.32% and 17.99% on average. Finally, some countermeasures and suggestions are put forward, such as actively publicizing cooperative’s services, guiding members to use cooperative’s services, improving the standardization level of cooperatives and strengthening policy support for cooperatives.