Collective action of smallholder farmers in “Big” market participation: Contract enforcement of cooperative members

Abstract

The commitment of the members is a necessary condition for the survival of the cooperative. The lower commitment of the members directly reduces the economies of scale of the cooperative and becomes an important reason for the failure of many cooperatives. This paper uses the survey data of 672 cooperative members in Shandong and Shaanxi provinces to analyze the influence of five types of factors on the members' commitments: the organization structure, governance mechanism, member characteristics, operating characteristics, and external environment. Through the survey, it is found that the current cooperatives face the dilemma of lower overall level of commitment of the members in the development process. The proportion of the products of the respondents to the cooperatives is only 62%, and the rest are sold to third parties other than the cooperatives. The results of the econometric analysis show that the level of commitment of the members is mainly affected by the size of cooperative members, whether there are price spillovers, whether or not they participate in cooperative decision-making, the number of years of education for the head of the household, the existence of financial constraints, production scale, sales experience, and whether or not the family members have non-agricultural employment channels. Time of participation, distance to the cooperative, fairness of the market, and influence of the region, but not the age of the householder, the heterogeneity of the cooperative members, whether the cooperatives supervise the sales behavior of the members, and whether the cooperatives communicate with the members regularly. (via Google translate)