Farmer cooperation in agro‐clusters: Evidence from Indonesia

Collective action in geographically concentrated farming regions can lead to improvements in farmer income. We model farmer cooperation inside such agro‐clusters as a two‐stage decision process. From 1,151 completely filled‐in questionnaires, we find that being located in an agro‐cluster increases farmers' likelihood to cooperate as well as enhances their income. Farmers' attitude towards cooperation is positively influenced by being male, having more assets, and operating a larger farm, but negatively affected if the farmer reports that her household is food vulnerable. The number of hours worked by farmers on the farm and the frequency of face‐to‐face meetings also raise the probability of engaging in cooperation. A higher density of agro‐clusters, higher crop diversity and being located farther away from urban centers are found to increase on average the income level of a farmer. Hence, the promotion of agro‐clusters also in rural regions remains a promising initiative for increasing farmer income.