Agricultural Cooperatives and Investment in Organic Soil Amendments and Chemical Fertilizer in China

Abstract

In this article, we develop a dynamic model to show how membership in agricultural cooperatives influences smallholder farmers' decisions to invest in organic soil amendments and chemical fertilizer. The model considers management decisions of heterogonous producers within an intertemporal framework, with the decision to join the cooperative assumed to be endogenous. Farm‐level data of apple farmers from three provinces in China are used to estimate the impact of cooperative membership on investment in organic soil amendments and chemical fertilizer. A recursive bivariate probit model that accounts for potential endogeneity of cooperative membership and selection bias is employed in the empirical analysis. The empirical results show that cooperative membership exerts a positive and statistically significant impact on the likelihood of investing in organic soil amendments. The findings also reveal that tenure security, human capital, farm size, and access to credit positively and significantly influence the probability of a farmer joining a cooperative and the likelihood of investing in soil quality measures.

Perceptions, Risk Attitude and Organic Fertilizer Investment: Evidence from Rice and Banana Farmers in Guangxi, China

“…Consequently, the Chinese government has recently exerted increasing efforts to reduce chemical fertilizer overuse and aim to reach zero growth in chemical fertilizer and pesticides use by 2020, which specifies incentive subsidies and tax exemption to organic fertilizers as well as formula fertilization with soil testing [10,11]. It is widely recognized that organic fertilizer can significantly improve soil quality and nutrition, farm productivity, and avoid adverse environmental and health impacts from agricultural chemical use and thus help achieve sustainable agricultural development [2,[12][13][14][15][16][17]. However, the adoption rate of organic fertilizer is still low compared to the increasing usage of chemical fertilizer because many farmers fear the loss of crop output and the odor of organic fertilizer [18,19].…”

“…For instance, some studies argue that organic fertilizer is a long-term investment option for farmers, and land tenure security is an important factor affecting its use [25][26][27], while others only find the impact of land tenure on investment in soil conservation measures to be weak [28,29]. Empirical evidence from Asian developing countries also suggests that off-farm work and agricultural cooperatives may be important in promoting investments in organic soil amendments [13,21]. Clearly, farmers' fertilizer investment decisions are jointly affected by a variety of factors, yet most studies focus on observable characteristics, leaving possible psychological determinants much less understood.…”

Roles of Motivation, Opportunity, Ability, and Trust in the Willingness of Farmers to Adopt Green Fertilization Techniques

“…It can be seen that the adoption motivation is the most important factor affecting the willingness of farmers to adopt green fertilization technology, followed by technical operation ability and adoption opportunity. Existing research shows that cooperative participation and production and sales contract signing are beneficial for farmers to adopt green fertilization technology [31][32][33]. Therefore, a cross-group structural equation model was used in this paper to explore the willingness and driving path of different types of farmers to adopt green fertilization technology.…”

The Impact of Program Participation on Rural Household Income: Evidence from China’s Whole Village Poverty Alleviation Program

“…Household head age, gender, and education are controlled because younger, male and educated household heads are more active in community co-management [26,34]. Younger and educated household heads are more likely to own more human capital [35]. As noted by Schultz and Schultz [36], human capital can improve people's abilities to perceive, interpret, and respond to affairs.…”