Primary producer sales prices and cooperatives: A cross-country, multi-product analysis

UNCTAD Research Paper No. 76

Using data from field surveys of maize farmers in Lao People’s Democratic Republic , herders in Mongolia, and fruit farmers in Uzbekistan, this paper presents new evidence concerning the relationship between cooperative membership and producer sales prices.

Controlling for covariates previously considered in the literature, and using a range of estimation methods to control for alternative sources of endogeneity bias, the analysis finds three key empirical results that are robust to country, product and estimation methods for farmers in Lao People’s Democratic Republic and Uzbekistan.

  • First, it documents positive relationships between land size under cultivation and farmer sales prices, highlighting the differential marketing challenges faced by smallholder farmers.

  • Second, the results indicate that cooperative membership approximately offsets the relative price disadvantages associated with small farm size.

  • Third, evidence is reported that failing to control for self-selection produces estimates that exhibit a significant downward bias for the effects of cooperatives on farmer sales prices.

In contrast to the above results, no statistically significant relationships were found between average sales prices reported by Mongolian herders and either herd size or membership of producer cooperatives.