IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v36y2020i4p725-750.html
   My bibliography  Save this article

Farmer cooperation in agro‐clusters: Evidence from Indonesia

Author

Listed:
  • Dadan Wardhana
  • Rico Ihle
  • Wim Heijman

Abstract

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.

Suggested Citation

  • Dadan Wardhana & Rico Ihle & Wim Heijman, 2020. "Farmer cooperation in agro‐clusters: Evidence from Indonesia," Agribusiness, John Wiley & Sons, Ltd., vol. 36(4), pages 725-750, October.
    • Handle: RePEc:wly:agribz:v:36:y:2020:i:4:p:725-750
    DOI: 10.1002/agr.21637
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/agr.21637
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.21637?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Uwe Deichmann & Somik V. Lall & Stephen J. Redding & Anthony J. Venables, 2008. "Industrial Location in Developing Countries," The World Bank Research Observer, World Bank, vol. 23(2), pages 219-246, May.
    2. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589833, September.
    3. Lazzeretti, Luciana & Capone, Francesco, 2016. "How proximity matters in innovation networks dynamics along the cluster evolution. A study of the high technology applied to cultural goods," Journal of Business Research, Elsevier, vol. 69(12), pages 5855-5865.
    4. Camille Chaserant, 2003. "Cooperation, Contracts and Social Networks: From a Bounded to a Procedural Rationality Approach," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 7(2), pages 163-186, June.
    5. Elinor Ostrom, 2010. "Analyzing collective action," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 155-166, November.
    6. Stallman, Heidi R. & James, Harvey S., 2015. "Determinants affecting farmers' willingness to cooperate to control pests," Ecological Economics, Elsevier, vol. 117(C), pages 182-192.
    7. Don Y. Lee & Eric W. K. Tsang, 2001. "The effects of entrepreneurial personality, background and network activities on venture growth," Journal of Management Studies, Wiley Blackwell, vol. 38(4), pages 583-602, June.
    8. Lajili, Kaouthar & Barry, Peter J. & Sonka, Steven T. & Mahoney, Joseph T., 1997. "Farmers' Preferences For Crop Contracts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(2), pages 1-17, December.
    9. Salvatore Di Falco & Marcella Veronesi & Mahmud Yesuf, 2011. "Does Adaptation to Climate Change Provide Food Security? A Micro-Perspective from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 825-842.
    10. Camille Chaserant, 2003. "Cooperation, contract and network: From a bounded to a procedural rationality approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01297141, HAL.
    11. Arent Greve & Janet W. Salaff, 2003. "Social Networks and Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 28(1), pages 1-22, January.
    12. Peter Österberg & Jerker Nilsson, 2009. "Members' perception of their participation in the governance of cooperatives: the key to trust and commitment in agricultural cooperatives," Agribusiness, John Wiley & Sons, Ltd., vol. 25(2), pages 181-197.
    13. Bernard Fingleton & Danilo Camargo Igliori & Barry Moore, 2004. "Employment Growth of Small High-technology Firms and the Role of Horizontal Clustering: Evidence from Computing Services and R&D in Great Britain, 1991-2000," Urban Studies, Urban Studies Journal Limited, vol. 41(4), pages 773-799, April.
    14. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589819, September.
    15. Todd M. Schmit & Jeffrey S. Hall, 2013. "Implications of Agglomeration Economies and Market Access for Firm Growth in Food Manufacturing," Agribusiness, John Wiley & Sons, Ltd., vol. 29(3), pages 306-324, June.
    16. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    17. Renate Schubert, 1999. "Financial Decision-Making: Are Women Really More Risk-Averse?," American Economic Review, American Economic Association, vol. 89(2), pages 381-385, May.
    18. Markelova, Helen & Meinzen-Dick, Ruth & Hellin, Jon & Dohrn, Stephan, 2009. "Collective action for smallholder market access," Food Policy, Elsevier, vol. 34(1), pages 1-7, February.
    19. Bolwig, Simon & Gibbon, Peter & Jones, Sam, 2009. "The Economics of Smallholder Organic Contract Farming in Tropical Africa," World Development, Elsevier, vol. 37(6), pages 1094-1104, June.
    20. Michael Lokshin & Zurab Sajaia, 2004. "Maximum likelihood estimation of endogenous switching regression models," Stata Journal, StataCorp LP, vol. 4(3), pages 282-289, September.
    21. Ron Boschma, 2005. "Editorial: Role of Proximity in Interaction and Performance: Conceptual and Empirical Challenges," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 41-45.
    22. Tsusaka, Takuji W. & Kajisa, Kei & Pede, Valerien O. & Aoyagi, Keitaro, 2015. "Neighborhood effects and social behavior: The case of irrigated and rainfed farmers in Bohol, the Philippines," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 227-246.
    23. Davidsson, Per & Honig, Benson, 2003. "The role of social and human capital among nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(3), pages 301-331, May.
    24. Geert Vissers & Ben Dankbaar, 2013. "Knowledge and Proximity," European Planning Studies, Taylor & Francis Journals, vol. 21(5), pages 700-721, May.
    25. Geldes, Cristian & Felzensztein, Christian & Turkina, Ekaterina & Durand, Aurélia, 2015. "How does proximity affect interfirm marketing cooperation? A study of an agribusiness cluster," Journal of Business Research, Elsevier, vol. 68(2), pages 263-272.
    26. Shenggen Fan & Connie Chan‐Kang, 2005. "Is small beautiful? Farm size, productivity, and poverty in Asian agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 135-146, January.
    27. H. S. Rohitha Rosairo & Michael C. Lyne & Sandra K. Martin & Kevin Moore, 2012. "Factors Affecting the Performance of Farmer Companies in Sri Lanka: Lessons for Farmer‐Owned Marketing Firms," Agribusiness, John Wiley & Sons, Ltd., vol. 28(4), pages 505-517, September.
    28. Karin Hakelius & Helena Hansson, 2016. "Measuring Changes in Farmers’ Attitudes to Agricultural Cooperatives: Evidence from Swedish Agriculture 1993–2013," Agribusiness, John Wiley & Sons, Ltd., vol. 32(4), pages 531-546, November.
    29. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589826, September.
    30. Udo Staber, 2007. "Contextualizing Research on Social Capital in Regional Clusters," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 31(3), pages 505-521, September.
    31. Mahmud Yesuf & Randall A. Bluffstone, 2009. "Poverty, Risk Aversion, and Path Dependence in Low-Income Countries: Experimental Evidence from Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1022-1037.
    32. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-433, June.
    33. Songsermsawas, Tisorn & Baylis, Kathy & Chhatre, Ashwini & Michelson, Hope, 2016. "Can Peers Improve Agricultural Revenue?," World Development, Elsevier, vol. 83(C), pages 163-178.
    34. Hansla, Andre & Gamble, Amelie & Juliusson, Asgeir & Garling, Tommy, 2008. "Psychological determinants of attitude towards and willingness to pay for green electricity," Energy Policy, Elsevier, vol. 36(2), pages 768-774, February.
    35. Fischer, Elisabeth & Qaim, Matin, 2012. "Linking Smallholders to Markets: Determinants and Impacts of Farmer Collective Action in Kenya," World Development, Elsevier, vol. 40(6), pages 1255-1268.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fatima Lambarraa-Lehnhardt & Rico Ihle & Khadija Mhaouch, 2021. "Geographical indications for supporting rural development in the context of the Green Morocco Plan: Oasis dates," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(2), pages 70-79.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Keisuke Hirano & Guido W. Imbens & Geert Ridder & Donald B. Rubin, 2001. "Combining Panel Data Sets with Attrition and Refreshment Samples," Econometrica, Econometric Society, vol. 69(6), pages 1645-1659, November.
    2. Hao, Jinghui & Heerink, Nico & Heijman, Wim & Bijman, Jos, 2017. "Cooperatives Membership And Smallholder Farmers’ Welfare - Evidence From Shaanxi And Shandong Provinces, China," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 260914, European Association of Agricultural Economists.
    3. Mossie, Mengistie & Gerezgiher, Alemseged & Ayalew, Zemen & Nigussie, Zerihun, 2021. "Welfare effects of small-scale farmers' participation in apple and mango value chains in Ethiopia," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 60(2), May.
    4. Willem H. Buiter, 2003. "James Tobin: An Appreciation of his Contribution to Economics," Economic Journal, Royal Economic Society, vol. 113(491), pages 585-631, November.
    5. Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460, Elsevier.
    6. Akramov, Kamiljon T. & Omuraliev, Nurbek, 2009. "Institutional change, rural services, and agricultural performance in Kyrgyzstan:," IFPRI discussion papers 904, International Food Policy Research Institute (IFPRI).
    7. Federica Di Marcantonio & Enkelejda Havari & Liesbeth Colen & Pavel Ciaian, 2022. "Do producer organizations improve trading practices and negotiation power for dairy farms? Evidence from selected EU countries," Agricultural Economics, International Association of Agricultural Economists, vol. 53(S1), pages 121-137, November.
    8. Huma Neupane & Krishna P. Paudel & Qinying He, 2023. "Impact of cooperative membership on market performance of Nepali goat farmers," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(3), pages 805-830, September.
    9. Symeonidis, George, 2001. "Price Competition, Innovation and Profitability: Theory and UK Evidence," CEPR Discussion Papers 2816, C.E.P.R. Discussion Papers.
    10. repec:zbw:bofrdp:2007_032 is not listed on IDEAS
    11. Alexander L. Brown & Zhikang Eric Chua & Colin F. Camerer, 2009. "Learning and Visceral Temptation in Dynamic Saving Experiments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 197-231.
    12. Patrick Francois & Joanne Roberts, 2003. "Contracting Productivity Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(1), pages 59-85.
    13. Joachim Inkmann, 2000. "Finite Sample Properties of One-Step, Two-Step and Bootstrap Empirical Likelihood Approaches to Efficient GMM Estimation," Econometric Society World Congress 2000 Contributed Papers 0332, Econometric Society.
    14. Donatella, Baiardi & Claudio, Morana, 2015. "Financial deepening and income distribution inequality in the euro area," Working Papers 316, University of Milano-Bicocca, Department of Economics, revised 04 Dec 2015.
    15. Sandholm, William H. & Izquierdo, Segismundo S. & Izquierdo, Luis R., 2019. "Best experienced payoff dynamics and cooperation in the Centipede game," Theoretical Economics, Econometric Society, vol. 14(4), November.
    16. Martin Gaynor & James B. Rebitzer & Lowell J. Taylor, 2004. "Physician Incentives in Health Maintenance Organizations," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 915-931, August.
    17. Dufour, Jean-Marie, 2006. "Monte Carlo tests with nuisance parameters: A general approach to finite-sample inference and nonstandard asymptotics," Journal of Econometrics, Elsevier, vol. 133(2), pages 443-477, August.
    18. Giovanna Devetag, 2000. "Transfer, Focality and Coordination: Some Experimental Results," LEM Papers Series 2000/02, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    19. Dmitri Kolyuzhnov & Anna Bogomolova, 2004. "Escape Dynamics: A Continuous Time Approximation," Econometric Society 2004 Latin American Meetings 27, Econometric Society.
    20. Yang, Qing Gong & Temple, Paul, 2012. "Reform and competitive selection in China: An analysis of firm exits," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 286-299.
    21. repec:ebl:ecbull:v:30:y:2010:i:1:p:55-66 is not listed on IDEAS
    22. Moundigbaye, Mantobaye & Messemer, Clarisse & Parks, Richard W. & Reed, W. Robert, 2020. "Bootstrap methods for inference in the Parks model," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 14, pages 1-18.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:36:y:2020:i:4:p:725-750. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.