Benefits and pitfalls of social capital for farmer cooperatives: evidence from China

Abstract

This paper conducts an exploratory analysis on the role of social capital in influencing both economic and social performance of farmer cooperatives based on a sample of 156 farmers from 54 vegetable cooperatives in China’s Hebei and Zhejiang provinces. Social capital is distinguished into bonding and bridging dimensions, with the former referring to the internal aspect of social capital and the latter the external “Guanxi” (meaning relationship) possessed by core members. The statistical results display that specific dimensions of social capital may not deliver the benefits expected by cooperative practitioners and academics. Both positive and negative effects of social capital on performances of farmer cooperatives are observed. To be specific, bonding social capital is positively associated with common members’ economic benefits. Bridging social capital generates beneficial outcomes for the financial and social performances of cooperatives, while exhibiting negative influence on common members’ income increase because of member heterogeneity.

Does Participation in Agricultural Cooperatives Affect Farm Sustainability? Empirical Evidence from Taiwan

“…However, Shumeta and D'Haese [13] find that while the average coffee farmer in Ethiopia did not benefit from cooperative membership across incomes, yields, or prices, larger farms did observe increased levels of farm performance, consistent with Verhofstadt and Maertens [11]. Similarly, Xu et al [14] find that cooperatives can negatively impact certain aspects of the social capital that vegetable farmers possess in China, subsequently impacting their economic performance.…”

“…We also create a binary variable to indicate whether a farm used food labels on their products. Similar to the empirical specifications of prior studies, we generate several categories of explanatory variables based on the literature studying cooperatives and farm performance [8,14]. These variables include age, gender, and educational attainment of the farm operator.…”

Social Capital and Financial Capital in Chinese Cooperatives

“…Studies of Chinese agricultural cooperatives similarly indicate the importance of social capital [18][19][20]. For example, Liang, Huang, Lu and Wang [20] found a positive relationship between the amount of social capital and members' participation in technical training and general meetings.…”

The Impact of Cooperative Membership on Fish Farm Households’ Income: The Case of Ghana

“…On the other hand, joining a cooperative may add less or no value to household income. For example, a cooperative association may lack effective and efficient leaders who can promote the development of the association to improve the wellbeing of the members; thus, farmers' performances may decrease rather than increasing [36]. Another reason for the negative impact of cooperatives on household income can be related to householder/household members' health statuses.…”