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Abstract By the end of October 2019, there were more than 2.2 million registered farmer cooperatives in China. An objective evaluation of their contribution to targeted poverty alleviation in rural China is of great necessity, as it provides important references for how cooperatives can help alleviate poverty and promote farmers’ income in the “post poverty alleviation era”. Against China’s background of rural-household differentiation, this paper examines the barriers faced by cooperatives to participate in rural poverty governance from the perspective of organizational service availability. The result of our equilibrium analysis shows that the transition of farmers’ professional identity, and hence the differentiation of their factor endowment, not only discourages vulnerable farmers from seeking organizational service but also encourages cooperatives to adopt the “cream-skimming” strategy. As a result, the service availability for vulnerable rural households is compromised, eventually leading to cooperatives’ failure in poverty governance.
This paper uses the three-phase farmer panel tracking data from 2015 to 2019 of the China Rural Household Panel Survey (CRHPS) and adopts the time-varying DID model to evaluate cooperatives’ contribution to and the effect of rural-household differentiation on poverty alleviation. The following findings are reported: (1) the poverty alleviation effect of cooperatives is not significant overall, which is supported by a series of robustness checks; and (2) there is a great disparity in cooperatives’ poverty alleviation effect across farmers and villages. Specifically, the poverty alleviation effect is significant for full-time farmers, which is more the case for villages with a low concentration of farmland and a more equal distribution of factor endowment, while the effect is compromised in villages where farmland is highly concentrated. The above empirical findings corroborate the result of the equilibrium analysis, i.e. the rapid transition of farmers’ professional identity and the differentiation of their factor endowment are major causes of cooperatives’ failure in poverty governance.
This paper has the following improvements compared to previous studies. First, unlike existing studies that judged whether farmers were “treated” based on “whether they joined a cooperative”, this paper takes organizational service availability as the criterion for the judgment. It not only factors in both the direct effect on cooperative members and the spill-over effect on non-members but also overcomes the interference of cooperatives’ selective membership in the result. Moreover, this paper adopts “whether a village has cooperatives” as the proxy variable for organizational service availability, which provides methodological references for future empirical studies. Second, previous studies interpreted the reasons behind cooperatives’ failure in poverty governance only from the perspective of cooperatives, while this paper adds the new perspective of farmers by incorporating the background of rural-household differentiation.
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Published: 28 September 2022
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