Study On The Efficiency Of Agricultural Cooperatives

Since1990s, China’s agricultural cooperatives have played an increasingly important role in advancing China’s agricultural modernization, increasing farmers’ income, and speeding up the rural economic. However, due to today’s increasingly globalized economy, China’s cooperatives face a growing competition both from the international and domestic industry. It is imperative for cooperatives to improve economic efficiency of cooperatives, thus maintaining cooperatives’competitive. To start, what is the cooperative’s operating efficiency? As is known to us, there are various types of cooperatives, such as marketing cooperatives, service cooperatives, and purchasing cooperatives. Then, are efficiency of these different types of cooperatives comparable? And what is the basis for them? Are there any significant differences between efficiency of different types of cooperatives? The product characteristics are the main factors that affect development of cooperatives in the same category. Moreover, there are several significant and obvious discrepancies between the production techniques of different cooperatives and market trading characteristics. What affects the efficiency of individual cooperative in the same category? How does the cooperatives’efficiency change from the view of dynamic development? And what is the primary source? Overall, it is of importance to promote the further development of China’s agricultural cooperatives, providing answers to the above questions. Before answers offered, the first needed to figure out is what is the connotation of the cooperatives efficiency? And what’s its specificity compared with enterprise organization? How to measure the efficiency of cooperatives accurately? How does the Static (short-term) efficiency differ from dynamic (long-term) efficiency? Considering these problems, this dissertation explores to expand theoretical analyses and empirical researches on the efficiency of agricultural cooperatives, aiming not only to broaden the theoretical scope of the existing references of cooperative efficiency, but also to provide scientific implications and policy recommendations for the development of China’s agricultural cooperatives.Based on the systematically theoretical analyses on efficiency of agricultural cooperative, this dissertation applies several econometric models in empirical studies. For instance, Bootstrap DEA model is applied into calculating the total (pure-/) technical efficiency and scale efficiency of marketing cooperatives in Zhejiang Province of2009, categorized by grain and general cash crops, vegetable and fruits, and livestock/poultry/aquatic products. Then Single Truncated Bootstrap procedure is introduced to identify the key factors, namely, cooperative scale, financial leverage, director board size, manager/entrepreneur ability, human capital of members and local economical development, affecting efficiencies. Finally, Bootstrap Malmquist Model is employed to test the TFP index and its source of grain and general cash crops, vegetable and fruits, and livestock/poultry/aquatic products of marketing cooperatives, respectively. In what follows, this dissertation presents the main conclusions on the basis of comparable analyses.(1) Connotation and characteristic of cooperative efficiencyThe cooperative efficiency mainly includes two aspects:internal efficiency referring cooperative input-output efficiency, and external efficiency representing the total social welfare contributions the cooperatives made. In addition, the hierarchy of cooperative efficiency is another point worthing mentioning comprises of input-output efficiency, sustainable-development efficiency and Pareto efficiency. Among these, input-ouput efficiency is a realistic choic for cooperatives. Different from the IOF, each kind of cooperatives has unique objective function, given specificity of cooperative efficiency. Dynamic efficiency is another type of cooperative efficiency, and the scale economics and technology progress should be taken into consideration when contrasts to static efficiency.(2) Empirical analysis on static efficiency of agriculture cooperativeObjective function is the basic premise of measuring the cooperative efficiency. To date, the existing references have constructed sort of functions but cannot be applied into empirical studies, for the inconsistency of objectives between cooperative and its members. This dissertation constructs objective function of marketing cooperatives integrating theory and practice in cooperative development in China. It provides an approach to advance existing theories, and to offer best foundation for empirical studies in this dissertation as well.(3) Calculations on static efficiency of marketing cooperatives.Both the total efficiency and efficiency calculation by product are relative low in Zhejiang Province’s cooperatives. And pure technical inefficiency is the main source of technical inefficiency. In the level of efficiency view, cooperative in livestock/poultry/aquatic have the highest level of technique and pure technical efficiency, while grain and cooperatives referring general cash crop have lowest level among three categories cooperatives. In the efficiency gap of cooperatives from each category view, cooperatives in grain and general cash crop have the smallest gap of all three kinds of efficiency, while cooperatives in vegetable and fruits have biggest gap of technical and pure technical efficiency. And the biggest scale efficiency gap appears between cooperatives from the third category. A possible explanation to heterogeneity of cooperative efficiency might be the heterogeneity of agricultural product characteristics and market competition.(4) Empirical analysis on dymatic efficiency of agriculture cooperativeThe empirical results demonstrate that factors such as cooperative scale, manager’s ability, human capital of cooperative members, levels of economic development significantly influence the static efficiency. Among these, manager’s ability and cooperative member’s human capital have the most important influence on efficiency. The same factor is paying different important affect in direction and in depth on different categories.(5) Empirical analysis on dynamic efficiency of agricultural cooperativeAmong2004-2009, the annual growth rate of TFP was positive at5%significance level, among three categories cooperatives, i.e. the grain and cash crops, vegetable and fruit, livestock/poultry/aquatic products. The technology progress indexes of the three types of cooperatives had an increasing improvement, which mainly incented by market competition, organizational institution innovation, and government support and active involvements.The results from empirical studies indicate that technical efficiency tends to a slow increment even downturn. The three kinds of technical inefficiency all derive from pure-technical inefficiency.The effect of governmental support is displayed by technology progress till2007. Meantime, it also improves TFP but widens the technical efficiency gap between cooperatives. All these results demonstrate that technology progress is "relative". In other words, TFP growth of cooperative mainly comes from technology progress rather than technical efficiency. Governmental support would widely enhance the technology progress. And approaches of cooperatives’TFP growth differ.In summary, this dissertation has a systematic analysis on efficiency issue of agricultural cooperatice by bonding together theoretical analysis with empirical study. In theoretically, the dissertation summarizes the existing references and researches in the certain area and constructs objective funtion in theoretic and practical. In addition, this dissertation employs several models and methods including Bootstrap DEA model, single truncated Bootstrap program and Bootstrap Malmquist method are by far most perfect models and methods in certain research area. Furthermore, this dissertation, for the first time, expands a further and deep analysis on efficiency issues of marketing cooperatives via conducting a survey of Zhejiang Province’s marketing cooperatives. Reliable and valuable conclusions are also drawn. Finally, this dissertation discusses some challenging topics that deserve further researches in future.