The role of agricultural cooperatives in serving as a marketing channel: Evidence from low-income regions of Sichuan province in China

Abstract

Although cooperative organizations aim to enhance agricultural production and marketing, in some countries such as China, not all members sell their products through agricultural cooperatives. This study examines the determinants of using agricultural cooperatives as a marketing channel and its effects on farm income and household income, using survey data collected from cooperative members in low-income regions of Sichuan province in China. We employ both propensity score matching model and inverse probability weighting estimator with regression adjustment to address the sample selection bias issue. The empirical results show that risk attitude, farm size, machine ownership, sales ability, and demonstration level of cooperatives are main factors that determine the members' decision to use agricultural cooperatives as a marketing channel, and the marketing channel users obtain significantly higher farm income and household income than nonusers. Our findings highlight the importance and necessity of promoting agricultural cooperatives as a marketing channel among non-users.