Exploring the Relation between Farmer Group Membership and Agricultural Productivity: Evidence from Indonesian Rice Farming

Authors

  • Lukman Mohammad Baga Department of Agribusiness, Faculty of Economics and Management, Bogor Agricultural University, Indonesia
  • Anisa Dwi Utami Department of Agribusiness, Faculty pf Economics and Management, Bogor Agricultural University, Indonesia
  • Ach Firman Wahyudi Department of Agribusiness, Faculty pf Economics and Management, Bogor Agricultural University, Indonesia

DOI:

https://doi.org/10.18196/agraris.v9i1.115

Keywords:

Farming productivity, Farming practices, Farmer’s characteristics, Group participation, Propensity Score Matching (PSM)

Abstract

Farmer groups have been critical in pursuing agricultural development, particularly in developing countries. Indonesia’s government has promoted the development of farmer groups in recent years, mainly in the rice sector, as a strategic agricultural commodity. This paper explored the relations between farmer group membership, farming practices, and productivity in the Indonesian rice sector. Propensity Score Matching (PSM) and regression analysis were employed to examine the 2014 National Agricultural Survey data. The empirical findings confirmed the positive relations between farmer group membership and productivity in the Indonesian rice sector. Furthermore, farmers’ characteristics covering age, gender, education level, and farming practices, such as land status and access to irrigation, all played a role in determining the extent to which farmers participated in farmer groups.

References

Abadie, A., & Imbens, G. W. (2006). Large Sample Properties of Matching Estimators for Average Treatment Effects. Econometrica, 74(1), 235–267. https://doi.org/10.1111/j.1468-0262.2006.00655.x

Abate, G. T., Francesconi, G. N., & Getnet, K. (2014). Impact of Agricultural Cooperatives on Smallholders’ Technical Efficiency: Empirical Evidence from Ethiopia. Annals of Public and Cooperative Economics, 85(2), 257–286. https://doi.org/10.1111/apce.12035

Abdul-Rahaman, A., & Abdulai, A. (2018). Do Farmer Groups Impact on Farm Yield and Efficiency of Smallholder Farmers? Evidence from Rice Farmers in Northern Ghana. Food Policy, 81, 95–105. https://doi.org/10.1016/j.foodpol.2018.10.007

Abdul-Rahaman, A., & Abdulai, A. (2020). Farmer Groups, Collective Marketing and Smallholder Farm Performance in Rural Ghana. Journal of Agribusiness in Developing and Emerging Economies, 10(5), 511–527. https://doi.org/10.1108/JADEE-07-2019-0095

Addison, M., Ohene-Yankyera, K., & Fredua-Antoh, E. (2016). Gender Role, Input Use and Technical Efficiency among Rice Farmers at Ahafo Ano North District in Ashanti Region of Ghana. Journal of Food Security, 4(2), 27–35.

Agarwal, B. (2018). Can group Farms Outperform Individual Family Farms? Empirical Insights from India. World Development, 108, 57–73. https://doi.org/10.1016/j.worlddev.2018.03.010

Ainembabazi, J. H., van Asten, P., Vanlauwe, B., Ouma, E., Blomme, G., Birachi, E. A., … Manyong, V. M. (2017). Improving the Speed of Adoption of Agricultural Technologies and Farm Performance through Farmer Groups: Evidence from the Great Lakes Region of Africa. Agricultural Economics, 48(2), 241–259. https://doi.org/10.1111/agec.12329

Barrett, C. B., Bachke, M. E., Bellemare, M. F., Michelson, H. C., Narayanan, S., & Walker, T. F. (2012). Smallholder Participation in Contract Farming: Comparative Evidence from Five Countries. World Development, 40(4), 715–730. https://doi.org/10.1016/j.worlddev.2011.09.006

Bellemare, M. F. (2012). As You Sow, So Shall You Reap: The Welfare Impacts of Contract Farming. World Development, 40(7), 1418–1434. https://doi.org/10.1016/j.worlddev.2011.12.008

Bernard, T., & Spielman, D. J. (2009). Reaching the rural poor through rural producer organizations? A study of agricultural marketing cooperatives in Ethiopia. Food Policy, 34(1), 60–69. https://doi.org/10.1016/j.foodpol.2008.08.001

Blekking, J., Gatti, N., Waldman, K., Evans, T., & Baylis, K. (2021). The Benefits and Limitations of Agricultural Input Cooperatives in Zambia. World Development, 146, 105616. https://doi.org/10.1016/j.worlddev.2021.105616

Boahene, K., Snijders, T. A. B., & Folmer, H. (1999). An Integrated Socioeconomic Analysis of Innovation Adoption: The Case of Hybrid Cocoa in Ghana. Journal of Policy Modeling, 21(2), 167–184. https://doi.org/10.1016/s0161-8938(97)00070-7

Caliendo, M., & Kopeinig, S. (2008). Some Practical Guidance for the Implementation of Propensity Score Matching. Journal of Economic Surveys, 22(1), 31–72. https://doi.org/10.1111/j.1467-6419.2007.00527.x

Chagwiza, C., Muradian, R., & Ruben, R. (2016). Cooperative Membership and Dairy Performance among Smallholders in Ethiopia. Food Policy, 59, 165–173. https://doi.org/10.1016/j.foodpol.2016.01.008

Conley, T. G., & Udry, C. R. (2010). Learning About a new Technology: Pineapple in Ghana. American Economic Review, 100(1), 35–69. https://doi.org/10.1257/aer.100.1.35

Danso-Abbeam, G., Baiyegunhi, L. J. S., & Ojo, T. O. (2020). Gender Differentials in Technical Efficiency of Ghanaian Cocoa Farms. Heliyon, 6(5). https://doi.org/10.1016/j.heliyon.2020.e04012

Fanzo, J. (2017). From Big to Small: The Significance of Smallholder Farms in the Global Food System. The Lancet Planetary Health, 1(1). https://doi.org/10.1016/S2542-5196(17)30011-6

Fischer, E., & Qaim, M. (2012). Linking Smallholders to Markets: Determinants and Impacts of Farmer Collective Action in Kenya. World Development, 40(6), 1255–1268. https://doi.org/10.1016/j.worlddev.2011.11.018

García-Germán, S., Bardají, I., & Garrido, A. (2016). Evaluating Price Transmission Between Global Agricultural Markets and Consumer Food Price Indices in the European Union. Agricultural Economics, 47(1), 59–70. https://doi.org/10.1111/agec.12209

Gedara, K. M., Wilson, C., Pascoe, S., & Robinson, T. (2012). Factors Affecting Technical Efficiency of Rice Farmers in Village Reservoir Irrigation Systems of Sri Lanka. Journal of Agricultural Economics, 63(3), 627–638. https://doi.org/10.1111/j.1477-9552.2012.00343.x

Gong, T. (Charles), Battese, G. E., & Villano, R. A. (2019). Family Farms Plus Cooperatives in China: Technical Efficiency in Crop Production. Journal of Asian Economics, 64, 101129. https://doi.org/10.1016/j.asieco.2019.07.002

Graeub, B. E., Chappell, M. J., Wittman, H., Ledermann, S., Kerr, R. B., & Gemmill-Herren, B. (2016). The State of Family Farms in the World. World Development, 87, 1–15. https://doi.org/10.1016/j.worlddev.2015.05.012

Gyau, A., Franzel, S., Chiatoh, M., Nimino, G., & Owusu, K. (2014). Collective Action to Improve Market Access for Smallholder Producers of Agroforestry Products: Key Lessons Learned with Insights from Cameroon’s Experience. Current Opinion in Environmental Sustainability, 6(1), 68–72. https://doi.org/10.1016/j.cosust.2013.10.017

Heinrich, C., Maffioli, A., & Vázquez, G. (2010). A Primer for Applying Propensity-Score Matching. In Inter-American Development Bank. Madison. Retrieved from http://www.iadb.org/document.cfm?id=35320229

Ibnu, M., Offermans, A., & Glasbergen, P. (2018). Certification and Farmer Organisation: Indonesian Smallholder Perceptions of Benefits. Bulletin of Indonesian Economic Studies, 54(3), 387–415. https://doi.org/10.1080/00074918.2018.1506093

Ito, J., Bao, Z., & Su, Q. (2012). Distributional Effects of Agricultural Cooperatives in China: Exclusion of Smallholders and Potential Gains on Participation. Food Policy, 37(6), 700–709. https://doi.org/10.1016/j.foodpol.2012.07.009

Koguashvili, P. (2016). Support for Agricultural Cooperatives is An Urgent Necessity. Annals of Agrarian Science, 14(4), 323–325. https://doi.org/10.1016/j.aasci.2016.09.009

Lin, B., Wang, X., Jin, S., Yang, W., & Li, H. (2022). Impacts of Cooperative Membership on Rice Productivity: Evidence from China. World Development, 150, 105669. https://doi.org/10.1016/j.worlddev.2021.105669

Luis, J. S., Rola-Rubzen, M. F., Paris, T. R., & Pede, V. O. (2015). Rural Labor Outmigration and Gender Dimension in an Assessment of Farm Technical Efficiency: A Case Study in Selected Rice Villages in the Philippines. Asian Journal of Agriculture and Development, 12(1), 53–65. https://doi.org/10.37801/ajad2015.12.1.4

Lyon, F. (2000). Trust, Networks and Norms: The Creation of Social Capital in Agricultural Economies in Ghana. World Development, 28(4), 663–681. https://doi.org/10.1016/S0305-750X(99)00146-1

Ma, Wangli, & Abdulai, A. (2016). Does Cooperative Membership Improve Household Welfare? Evidence from Apple Farmers in China. Food Policy, 58, 94–102. https://doi.org/10.1016/j.foodpol.2015.12.002

Ma, Wanglin, Zheng, H., & Yuan, P. (2022). Impacts of Cooperative Membership on Banana Yield and Risk Exposure: Insights from China. Journal of Agricultural Economics, 73(2), 564–579. https://doi.org/10.1111/1477-9552.12465

Markelova, H., Meinzen-Dick, R., Hellin, J., & Dohrn, S. (2009). Collective Action for Smallholder Market Access. Food Policy, 34(1), 1–7. https://doi.org/10.1016/j.foodpol.2008.10.001

Methamontri, Y., Tsusaka, T. W., Zulfiqar, F., Yukongdi, V., & Datta, A. (2022). Factors Influencing Participation in Collective Marketing through Organic Rice Farmer Groups in Northeast Thailand. Heliyon, 8(11), e11421. https://doi.org/10.1016/j.heliyon.2022.e11421

Ministry of Agriculture. (2018). Statistics of Farmer Group in Indonesia. Jakarta: Kementerian Pertanian Indonesia.

Mishra, A. K., Khanal, A. R., & Mohanty, S. (2017). Gender Differentials in Farming Efficiency and Profits: The Case of Rice Production in the Philippines. Land Use Policy, 63, 461–469. https://doi.org/10.1016/j.landusepol.2017.01.033

Mojo, D., Fischer, C., & Degefa, T. (2017). The Determinants and Economic Impacts of Membership in Coffee Farmer Cooperatives: Recent Evidence from Rural Ethiopia. Journal of Rural Studies, 50, 84–94. https://doi.org/10.1016/j.jrurstud.2016.12.010

Musilah, R. N., Putri, T. A., & Utami, A. D. (2021). Aktivitas dan Biaya Produksi Usahatani Padi pada Program UPSUS Pajale di Kabupaten Demak. Forum Agribisnis, 11(2), 153–166. https://doi.org/10.29244/fagb.11.2.153-166

Obayelu, A. E., Ogbe, A. O., & Edewor, S. E. (2020). Gender Gaps and Female Labour Participation in Agriculture in Nigeria. African Journal of Economic and Management Studies, 11(2), 285–300. https://doi.org/10.1108/AJEMS-03-2019-0128

Olagunju, K. O., Ogunniyi, A. I., Oyetunde-Usman, Z., Omotayo, A. O., & Awotide, B. A. (2021). Does Agricultural Cooperative Membership Impact Technical Efficiency of Maize Production in Nigeria: An Analysis Correcting for Biases from Observed and Unobserved Attributes. PLoS ONE, 16(1 January), e0245426. https://doi.org/10.1371/journal.pone.0245426

Pratiwi, A., & Suzuki, A. (2017). Effects of Farmers’ Social Networks on Knowledge Acquisition: Lessons from Agricultural Training in Rural Indonesia. Journal of Economic Structures, 6, 8. https://doi.org/10.1186/s40008-017-0069-8

Qu, R., Wu, Y., Chen, J., Jones, G. D., Li, W., Jin, S., … Frewer, L. J. (2020). Effects of Agricultural Cooperative Society on Farmers’ Technical Efficiency: Evidence from Stochastic Frontier Analysis. Sustainability, 12(19), 8194. https://doi.org/10.3390/su12198194

Reardon, T., Barrett, C. B., Berdegué, J. A., & Swinnen, J. F. M. (2009). Agrifood Industry Transformation and Small Farmers in Developing Countries. World Development, 37(11), 1717–1727. https://doi.org/10.1016/j.worlddev.2008.08.023

Seymour, G. (2017). Women’s Empowerment in Agriculture: Implications for Technical Efficiency in Rural Bangladesh. Agricultural Economics (United Kingdom), 48(4), 513–522. https://doi.org/10.1111/agec.12352

Spielman, D. J., Kelemwork, D., & Alemu, D. (2011). Seed, Fertilizer, and Agricultural Extension in Ethiopia (No. ESSP II Working Paper 020). Washington, D.C. Retrieved from https://www.ifpri.org/publication/seed-fertilizer-and-agricultural-extension-ethiopia

Statistics Indonesia. (2019). Statistics of Agriculture. Jakarta: BPS-Statistics Indonesia.

Tirtalistyani, R., Murtiningrum, M., & Kanwar, R. S. (2022). Indonesia Rice Irrigation System: Time for Innovation. Sustainability, 14(19), 12477. https://doi.org/10.3390/su141912477

Utami, A. D. (2022). Do Women Produce Efficiently? Empirical Evidence from Rice Farming in Indonesia. IOP Conference Series: Earth and Environmental Science, 1107, 012024. https://doi.org/10.1088/1755-1315/1107/1/012024

Utami, A. D., & Harianto, H. (2021). Farmers’ Subsistence in Indonesian Rice Farming. Jurnal Agribisnis Indonesia, 9(2), 79–87. https://doi.org/10.29244/jai.2021.9.2.79-87

Verhofstadt, E., & Maertens, M. (2015). Can Agricultural Cooperatives Reduce Poverty? Heterogeneous Impact of Cooperative Membership on Farmers’ Welfare in Rwanda. Applied Economic Perspectives and Policy, 37(1), 86–106. https://doi.org/10.1093/aepp/ppu021

Wollni, M., & Brümmer, B. (2012). Productive Efficiency of Specialty and Conventional Coffee Farmers in Costa Rica: Accounting for Technological Heterogeneity and Self-Selection. Food Policy, 37(1), 67–76. https://doi.org/10.1016/j.foodpol.2011.11.004

Wossen, T., Abdoulaye, T., Alene, A., Haile, M. G., Feleke, S., Olanrewaju, A., & Manyong, V. (2017). Impacts of Extension Access and Cooperative Membership on Technology Adoption and Household Welfare. Journal of Rural Studies, 54, 223–233. https://doi.org/10.1016/j.jrurstud.2017.06.022

Downloads

Published

2023-04-29

How to Cite

Baga, L. M., Utami, A. D., & Wahyudi, A. F. (2023). Exploring the Relation between Farmer Group Membership and Agricultural Productivity: Evidence from Indonesian Rice Farming. AGRARIS: Journal of Agribusiness and Rural Development Research, 9(1), 65–78. https://doi.org/10.18196/agraris.v9i1.115

Issue

Section

Research Article