Effects of agricultural cooperative services on rural household welfare in Thailand

Abstract

Agricultural Cooperatives (ACs) enable rural households to fight against poverty. ACs provide credit and non-credit support services to improve household welfare. However, the results of AC effects on household welfare are mixed. This study contributes to the growing literature by investigating the effects of AC credit and non-credit support services on rural Thai household welfare using the Endogenous Switching Regression and Endogenous Switching Probit models. Data was collected in 2017 using a household survey. A two-stage stratified sampling technique was employed to obtain the study sample from rural Thai households. The result shows that AC services play important roles in improving household welfare. Both AC credit and marketing services exhibit significant, positive effects on household and farm income. AC marketing services are more effective in improving household welfare compared to AC credit. However, only AC credit considerably increases household consumption and the adoption of improved farm technologies and practices. Interestingly, AC credit and marketing services do not improve children's education in terms of educational expenditure and school enrolment rates.