Impact of New-Type Agricultural Cooperatives on Profitability of Rice Farms: Evidence from Vietnam’s Mekong River Delta

Round 1

Reviewer 1 Report

Agricultural cooperatives play a vital role in the well-being of individuals and communities, such as job creation, unemployment reduction, economic growth, and social development. Modern agriculture depends heavily on farmers. Farmers continue to serve as a model of cooperative development despite the existence of numerous different forms. This demonstrates the central role that agricultural cooperatives play in the system of agricultural organization. Agricultural cooperatives can help small-scale producers increase their productivity and economic benefits, as well as negotiate more effectively with other supply chain actors. Cooperatives play a crucial role in assisting households to increase their productivity through the adoption of small-scale commercial agriculture. Agricultural cooperatives connect agricultural producers through economic and cooperative cooperation. Utilizing the strengths of each member, it creates a collective force and increases production efficiency. Cooperatives can engage in a variety of member-beneficial activities that aid in achieving these objectives. Cooperatives contribute to expansion and marketing. Additionally, cooperatives provide members with access to capital. Members view the co-op as a viable and dependable source of assistance and services. Socially, the agricultural cooperative plays a crucial role in protecting and developing the community, as well as in resolving any potential tensions and challenges that may arise. As a result, agricultural cooperatives contribute to the resolution of a variety of issues, including rural unemployment and economic and social issues.

Using two-stage PSM and Heckman models, the study estimates the impact or not of agricultural cooperative membership on the profitability of rice households in the Mekong Delta of Vietnam. The findings indicate that cooperative membership has a positive and significant effect on the ROC of rice farmers in the Mekong River Delta. It was found that the probability of joining a cooperative is positively correlated with the age of the household head and the size of the agricultural land.

 

Introduction

No comments. The introduction presents background information and purpose of study.

There are no remarks regarding the structure.

Materials and Methods

·         The methods employed are explained in detail. The variables used in the model are defined and explained. There are no observations

 

Results/ Discussion

There are no remarks.

Conclusion

I would suggest to the authors certain additions related to the limitations of the study.

 

Other questions:

·         Apart from the possibility of accessing certain financing measures, does the government offer certain facilities for agricultural cooperatives (eg tax facilities)?

·         Given the various stages that agricultural cooperatives have gone through in Vietnam, whether or not to belong to a cooperative may be influenced by trust in such forms. A very good example addressed in the article is represented by the membership or not of acquaintances in such forms of association. Another good indicator would be trust in the management of the cooperative. Are there training programs for managers to increase confidence in agricultural cooperatives?

 

 

Author Response

We thank you for your helpful comments. You can find our responses to your comments below and see the attachment file.

Comment: I would suggest to the authors certain additions related to the limitations of the study.

Response: We have revised our conclusion by adding the limitations of the study. Please reconsider and accept our revision.

Question: Apart from the possibility of accessing certain financing measures, does the government offer certain facilities for agricultural cooperatives (eg tax facilities)?

Response: The government does not provide any subsidy to agricultural cooperatives. According to the law of cooperatives, agricultural cooperatives are run or operated as enterprise they have to pay business tax.

Question: Given the various stages that agricultural cooperatives have gone through in Vietnam, whether or not to belong to a cooperative may be influenced by trust in such forms. A very good example addressed in the article is represented by the membership or not of acquaintances in such forms of association. Another good indicator would be trust in the management of the cooperative. Are there training programs for managers to increase confidence in agricultural cooperatives?

Response: Provincial department of rural development, and provincial cooperative alliance often organize or deliver training course on management and facilitation skills to leaders of cooperatives

Reviewer 2 Report

The authors of this paper have explored a very important topic, that of farmers’ participation in cooperatives and the potential effects it may have on farm profitability. They have used a good methodological approach and presented the design and results of their research in a coherent and concise manner, pointing out the implications of their findings. I found it an interesting read and my only recommendation is that of language editing.  

Author Response

Dear reviewer 2,

We have checked and edited English by an English native speaker. We would like to thank for your helpful comments

Reviewer 3 Report

The article concerns an important issue, which is the impact of membership in an agricultural cooperative on the economic results of a farm and the factors that affect joining the cooperative.

The chosen methods are appropriate and sufficient to solve a given research problem.

The conclusions are quite broad are carried out from the research. They are also practical guidelines for conducting governmental policy. Readers from other countries can take advantage of the conclusions presented and adapt them to their realities.

Technical comments:

- lines 93 and 110 need a footnote from the literature

- line 125 - here it is a bit unclear - does the new type of cooperative result from the definition of the Act of 2012 or is it a newer concept and results from something else? Please explain

- line 187 needs a footnote from the literaturę

- table 1:

--is it the experience of the head of the household?

-- Distance to hamlet head - who is it, is it the mayor or is it an institution, an office where you can find an official to help with rice production? Please explain under table

- table 2:

-- which means „mill.” in Farm performances?

          -- what variable costs were taken into account?

-- 1)is the formula used for the ROC correct if we divide the value / ha into the total profit and not from ha and 2) should the formula not be in the form of 2/1?

- The results from Table 6 have not been discussed specifically enough, please complete with numbers.

Best regards

Author Response

Dear reviewer 3,

Thank you very much for your valuable comments. Please see the attachment file to find our responses.

Best regards,

Nhan

Author Response File: Author Response.pdf

Reviewer 4 Report

The article presented here addresses the important topic of the economic benefits of farmers' cooperation in cooperatives in Vietnam. Methodologically, the article is prepared correctly. Adequately selected research sample and applied methodology allows to draw conclusions. The main comments are:

1. There is a lack of reference to European literature addressing the issue of the functioning of farms in the form of production cooperatives, especially in the Netherlands, Denmark and Germany. The experience of functioning of farmers in the form of cooperatives in these countries is large.

2. Describing the history of cooperatives in Vietnam, the author did not present other legal and organizational forms of farmers' cooperation. What distinguishes cooperatives in Vietnam from companies (limited liability companies, civil partnerships and others), possibly other legal forms?

3. There is a lack of information about legal regulations encouraging farmers to organize themselves into cooperatives. Are there any subsidies from the state to agricultural cooperatives?

Author Response

Dear reviewer 4,

We thank you for your useful comments. Please reconsider our response and accept our revised version. You can find our responses below and see the attachment file.

1. As you mentioned, some European countries may have long history and success of agricultural cooperatives. However, we have found a few evidence on impact of cooperative membership published recently and contents of other studies conducted in Europe are not proper to cite in our paper. Please reconsider and accept our revision.
2. In Vietnam, there are several forms of farmer organizations such as farmer club, collaborative group of farmers, agricultural extension club but these forms are informal ones. Whereas cooperative is considered a formal form of farmer organization. It is operated and run under the cooperative law. It is also operated as an enterprise. The definition of cooperative in Vietnamese cooperative law 2012 was also adopted by cooperative definition of International Cooperative Alliance

In this paper, we have mainly focused on the impact of agricultural cooperatives on members’ farm performance. We thus did not mention about other farmer-based organizations and basically describe about the cooperatives.

3. The main objective of this study was to examine the impact of cooperative membership, thus we have not focused on what motivate farmers to participate in cooperatives such as supporting policies. The government does not have any subsidy to agricultural cooperatives. However, the government often have supporting program to the cooperatives such as delivering training classes to leaders of cooperatives, providing extension services to members, and giving advice to cooperative operation