IPM adoption, cooperative membership and farm economic performance

Purpose The purpose of this paper is to examine the impact of agricultural cooperative membership on farmers’ decisions to adopt integrated pest management (IPM) technology and to estimate the impact of IPM adoption on farm economic performance. Design/methodology/approach An endogenous switching probit model that addresses the sample selection bias issue arising from both observed and unobserved factors is used to estimate the survey data from a sample of 481 apple households in China. A treatment effects model is employed to estimate the impact of IPM adoption on apple yields, net returns and agricultural income. In order to address the potential endogeneity associated with off-farm work variable in estimating both cooperative membership choice specification and IPM adoption specifications, a control function approach is used. Findings The empirical results show that cooperative membership exerts a positive and significant impact on the adoption of IPM technology. In particular, farmers’ IPM adoption decision is significantly associated with household and farm-level characteristics (e.g. education, farm size and price knowledge). IPM adoption has a positive and statistically significant impact on apple yields, net returns and agricultural income. Practical implications The findings indicate that agricultural cooperatives can be a transmission route in the efforts to proliferate the adoption and diffusion of IPM technology, and increased IPM adoption tends to improve the economic performance of farm households. Originality/value Despite the widespread evidence of health and environmental benefits associated with IPM technology, the adoption rate of this technology remains significantly low. This paper provides a first attempt by investigating to what extent and how agricultural cooperative membership affects IPM adoption and how IPM adoption influences farm economic performance.