Impact of cooperative membership on production efficiency of smallholder goat farmers in Nepal

Abstract

Goat is a source of cash income to smallholders in many developing countries. The productivity of goat farmers is poorly understood and assumed similar across all households. Cooperatives are hailed as an institution that can provide market power to smallholders in developing countries. We assess the impact of cooperatives on the technical efficiency of goat farmers in Nepal. Multistage sampling and in-person interviews were used to collect information from 334 nonmember and 327 member cooperative farmers from two prominent goat production districts in Nepal. We use translog production function to calculate the technical efficiency. The endogeneity associated with cooperative membership is addressed through an instrumental variable approach. The onestep analysis was used to avoid bias due to the onesided stochastic frontier analysis error. All conventional inputs have significant and positive impact on performance. Cooperative membership shows positive and significant impact on technical efficiency. The average technical efficiency score of cooperative members was 93.2%, while of nonmembers was 90.7%, and the difference was significant. Variables positively affecting

Yield effects of agricultural cooperative membership in developing countries: A meta‐analysis

“…Prior evidence also reveals that cooperative membership plays a significant role in improving the technical efficiency of crop and livestock production. (Abate et al 2014;Addai et al 2022;Ahado et al 2021;Lin et al 2022;Neupane et al 2022;Olagunju et al 2021;Qu et al 2020). Ahado et al (2021) analyzed the impact of cooperative membership on the technical efficiency of potato farmers in Mongolia and found that cooperative members are more technically efficient with an average technical efficiency between 64% and 71%, in comparison to 54%-57% for nonmembers.…”

“…This is further confirmed by Olagunju et al (2021), who investigated maize production in Nigeria and found that the technical efficiency of cooperative members is 49% higher than that of non-members. Neupane et al (2022) estimated the production efficiency of goat production in Nepal. They found that the average technical efficiency scores of cooperative members and non-members are 93.2% and 90.7%, and the difference is statistically significant.…”

“…However, β𝑖 is not directly comparable across studies for at least two reasons. First, studies estimate yields for a variety of farm products such as apple (Ma & Abdulai 2016), potato (Ahado et al 2021), maize (Olagunju et al 2021), rice (Bairagi & Mottaleb 2021), banana (Ma et al 2022a), coffee (Ortega et al 2019), dairy (Chagwiza et al 2016), and goat (Neupane et al 2022). Accordingly, different units (e.g., tons, kilograms, and litres) are employed to measure yields.…”

“…Most studies show that cooperative membership increases yield (Ahado et al 2021;Bairagi & Mottaleb 2021;Chagwiza et al 2016;Ingutia & Sumelius 2022). In contrast, some find that cooperative membership has little (Hun et al 2018;Kashiwagi 2020;Mwaura 2014;Shumeta & D'Haese 2016) or even a negative impact on yield (Fischer & Qaim 2012;Neupane et al 2022).…”

“…2018; Kashiwagi 2020; Mwaura 2014; Shumeta & D'Haese 2016) or even a negative impact on yield (Fischer & Qaim 2012; Neupane et al. 2022).…”