Can Agricultural Cooperatives Reduce Poverty? Heterogeneous Impact of Cooperative Membership on Farmers' Welfare in Rwanda

TLDR

The study examines how inclusive and effective agricultural cooperatives are in Rwanda. The authors use propensity score matching to estimate average income and poverty effects of cooperative membership and examine how these effects vary by farm size, farmer characteristics, and propensity score. Cooperative membership raises income and lowers poverty, especially for larger farms and remote areas, but the strongest effects occur among farmers least likely to join cooperatives, indicating negative selection.

Abstract

Abstract We analyze the inclusiveness and effectiveness of agricultural cooperatives in Rwanda. We estimate mean income and poverty effects of cooperative membership using propensity score matching techniques. We analyze heterogeneous treatment effects across farmers by analyzing how estimated treatment effects vary over farm and farmer characteristics and over the estimated propensity score. We find that cooperative membership in general increases income and reduces poverty and that these effects are largest for larger farms and in more remote areas. We find evidence of a negative selection because impact is largest for farmers with the lowest propensity to be a cooperative member.