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Does Participation in Agricultural Cooperatives Affect Farm Sustainability? Empirical Evidence from Taiwan

Author

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  • Bo Wang

    (School of Economics and Management, Fuzhou University of International Studies and Trade, Fuzhou 350202, China)

  • Po-Yuan Cheng

    (Department of Leisure and Recreation Management, Taipei City University of Science and Technology, Taipei 112, Taiwan)

  • Brian Lee

    (Department of Agricultural Economics, National Taiwan University, Taipei 10617, Taiwan)

  • Lih-Chyun Sun

    (Department of Urban Industrial Management and Marketing, University of Taipei City, Taipei 11153, Taiwan)

  • Hung-Hao Chang

    (Department of Agricultural Economics, National Taiwan University, Taipei 10617, Taiwan)

Abstract

Recent research has highlighted the importance of agricultural cooperatives on farm production. Although the consensus from the literature suggests that participating in these organizations significantly affects farm production, there is inconclusive evidence on whether this effect is positive or negative. Moreover, previous studies solely focus on the magnitude of this effect and fail to explain the mechanism behind it. This study contributes to this knowledge gap by estimating the impact of agricultural cooperatives on farm profits. To do this, we apply the causal mediation analysis to explain the potential mechanism behind this relationship. Using a nationally representative survey of farm households from Taiwan in 2013, we find that participating in cooperatives increases farm profits. Furthermore, this effect is more pronounced for producers with higher profits. Concerning the mechanism, we find that the use of food labels accounts for approximately 15 to 28% of the total effect of cooperative participation on farm profits.

Suggested Citation

  • Bo Wang & Po-Yuan Cheng & Brian Lee & Lih-Chyun Sun & Hung-Hao Chang, 2019. "Does Participation in Agricultural Cooperatives Affect Farm Sustainability? Empirical Evidence from Taiwan," Sustainability, MDPI, vol. 11(18), pages 1-12, September.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:18:p:4987-:d:266613
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    References listed on IDEAS

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    2. Bairagi, Subir K. & Mishra, Ashok K., 2020. "Do Farmers’ Organizations Impact Production Efficiency? Evidence from Bangladeshi Rice Farmers," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304179, Agricultural and Applied Economics Association.
    3. Mei-Yin Kuan & Szu-Yung Wang & Jiun-Hao Wang, 2021. "Investigating the Association between Farmers’ Organizational Participation and Types of Agricultural Product Certifications: Empirical Evidence from a National Farm Households Survey in Taiwan," Sustainability, MDPI, vol. 13(16), pages 1-18, August.
    4. Zhang, Jian & Mishra, Ashok K. & Zhu, Peixin & Li, Xiaoshun, 2020. "Land rental market and agricultural labor productivity in rural China: A mediation analysis," World Development, Elsevier, vol. 135(C).

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