IJERD – International Journal of Environmental and Rural Development (2016) 7-1

Research article
erd

Impact of Smallholder Agricultural Cooperatives on Market
Participation of Vegetable Farmers in Cambodia:
A Case Study of Svay Rieng Agro-Products Cooperative
DARY PHON*
University of Tokyo, Kashiwa City, Japan
Email: phondary@gmail.com

EIJI YAMAJI
The University of Tokyo, Kashiwa City, Japan
Received 14 November 2015

Accepted 29 April 2016(*Corresponding Author)

Abstract Agricultural cooperatives play a crucial role in improving Cambodian farmers’participation in vegetable markets. Cambodia’s vegetable sector is afflicted by the dual
problems of supply and quality; the country imports huge amounts of vegetables from Vietnam
and Thailand, and most domestic vegetable production is still inorganic. This quantitative study
shows the impacts of Svay Rieng Agro-Products Cooperative (SAC) on its members’
participation in vegetable markets. Data was collected from a survey of 44 SAC members and20 non-SAC members in Svay Rieng province. A market participation index was used tomeasure the level of respondents’ market participation. Based on the quantity of vegetables sold,the 64 sample farmers represent four levels of market participation across 52 market
participation scores: level 1 includes scores 4-16 (35.9% of total respondents); level 2 scores12-32 (32.8%); level 3 scores 24-36 (17.2%); and level 4 scores 32-52 (14.1%). T-test analysis
shows that the participation in vegetable market of SAC members is higher than that of nonmembers. Logit model reveals that variable of growing vegetables as a primary source ofhousehold income is positively related to the probability of selling vegetables to SAC. Tobit
model is used to determine factors affecting market participation levels of SAC members. The
study revealed five factors as critical variables affecting effective market participation: 1)
education level of household head, 2) receiving market information, 3) volume of vegetableproduction, 4) distance to main market, and 5) the extent to which vegetable growers supply
SAC. The study stresses the importance of agricultural cooperatives in improving famers’participation in vegetable markets. Plus, the results concerning the probability of sellingvegetables and level of participation in vegetable markets can usefully contribute to informing
and improving the royal decree and prakas on agricultural cooperatives in Cambodia.
Keywords agricultural cooperative, market participation, Cambodia

INTRODUCTION
Cambodia’s agriculture sector contributed about 27.5% of total GDP in 2012, and crop production
alone accounted for 55% of agricultural GDP (MAFF 2013). Although vegetable production inCambodia increased between 2007 and 2013 (MAFF 2013), Cambodia supplements 40-50% of its
vegetable consumption with imports from Vietnam and Thailand. In 2010, for instance, vegetable
imports amounted to 70 to 80 tonnes a day (Vietnam Business News, 2010). This huge volume ofimports is affecting most stakeholders in the vegetable sector. The Cambodian government iscommitted to improving agricultural development and promoting smallholder livelihoods through theestablishment of agricultural cooperatives. Agricultural cooperatives play an important role in ruralⒸ ISERD

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economic development and poverty alleviation (Chea, 2010). Yet few studies have examined theimpact of agricultural cooperatives on farmers’ participation in vegetable markets in Cambodia.
OBJECTIVEThe objectives of the study are to evaluate the impacts of SAC on market participation of SAC
members, and to determine the factors affecting the extent of their market participation.
METHODOLOGYHousehold survey: A structured questionnaire was used to gather information from 44 SAC member
households and 20 non-member households. Household heads or other adult family members wereinterviewed face-to-face. Six of the 20 areas covered by SAC were selected for survey. These areas
were chosen because the farmers there are more likely to grow the crops of interest, namely cucumbers,Chinese cabbage, Chinese greens, pickle cabbage and dwarf cabbage, than in the other areas. Allfarmers in the six areas who had produced these five crops in the previous growing season wereengaged in face-to-face interviews.
Data analysis: Market participation index, T-test, logit and tobit regression models were used.
Following Gani and Adeoti (2011), the market participation index was used to measure the level ofmarket participation among respondents in the study areas. Table 1 describes the index used incomputing the total market participation index (TMPI).
Table 1 Market participation index

Quantity sold (L)Homestead(X1)>0 - <450kg (L1)1451 - 1000 (L2)21001-1450 (L3)3>1450 (L4)4
Note: * Developed by authors
Source: Gani and Aeoti 2011Market location (X)Farm Village
Town
gate
market market(X2)
(X3)
(X4)
2
3
44
68
6
9128
1216

ScoresPeriod of sale (Y)City
OnOffmarket season
season
(X5)
(Y1)
(Y2)
51
2
102
4
15
3
620
4
8

Buyer (Z)Consu-mer(Z1)1234

Trader(Z2)

SAC(Z3)*246836912The total market participation index (TMPI) represents each respondent’s score, and the scoreregulates the level of participation in the market. When the scores for the quantities of vegetables soldand other indices including market location, period of produce sale, and buyers were computed, theminimum market participation score 3 indicates the lowest level and 96 the highest level ofparticipation.
Minimum Score= X1(L1)+Y1(L1)+Z1(L1)=3
Maximum Score= X1(L4)+X2(L4)+X3(L4)+X4(L4)+X5(L4)+Y1(L4)+Y2(L4)+Z1(L4)+Z2(L4)+Z3(L4)=96
In addition, the different levels of farmers’ participation in vegetable markets were determinedusing the following formula:

RTMPI
100
X
NMPWC
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where RTMPI = replication/frequency of total market participation indices, and NMPWC =number/size of market participants within a given category.
T-test as modeled by the t-distribution was used to test the statistical difference in the average
market participation score of SAC members and non-members. Logit model was used to determine theprobability of farmer-members selling vegetables to SAC. Tobit model was used to determine factors
influencing the level of SAC members’ market participation in the study areas.
RESULTS AND DISCUSSION
Impact of Svay Rieng Agro-Products Cooperative on Market Participation
The four levels of market participation signify that although the 64 surveyed farmers participated in themarket, they did so to different degrees. The various levels of market participation in the study areas
and their scores are shown in Fig. 1; the main features of the data are described below.
At level 1, 23 respondents (35.9% of the total) participated in the market; score level 4 (4.35%)
has the fewest and score level 16 the most participating farmers (4.35%). Majority of farmers in thislevel fall into score levels 8, 10, 13 (17.39% at each score level).
At level 2, 21 respondents (32.8%) participated in the market; score level 12 (4.76%) has thefewest and score level 32 the most participating farmers (4.76%). Most farmers in this level areconcentrated in score levels 16 and 20 (19.05%) and 24 (23.81%).
At level 3, 11 respondents (17.2%) participated in the market; score level 24 (45.45%) has thefewest and score level 36 the most participating farmers (9.10%). Most farmers in this level have ascore level of 24 or 30 (45.45%).
At level 4, 9 respondents (14.1%) participated in the market; score level 32 (22.22%) has thefewest and score level 52 the most participating farmers (44.45%) in this level. Most farmers havescore levels of 52 (44.45%) or 30 (22.22%).

14.29%

4.76%

17.39%

4.35%

8.70%

17.39%

4.76%

23.81%

9.10%

45.45%

44.45%

Score level 9
Score level 14
Score level 24
Score level 40

11.11%

11.11%

19.05%
13.04%

4.76%
4.76%

13.04%

MARKET PARTICIPATION OF LEVEL 1

4.35%
4.35%

MARKET PARTICIPATION OF LEVEL 2

19.05%

MARKET PARTICIPATION OF LEVEL 3

4.76%

45.45%

MARKET PARTICIPATION OF LEVEL 4

Score level 8
Score level 13
Score level 22
Score level 36

11.11%

Score level 6
Score level 12
Score level 20
Score level 32
Score level 52

17.39%

Score level 5
Score level 11
Score level 18
Score level 30
Score level 48

22.22%

Score level 4
Score level 10
Score level 16
Score level 26
Score level 44

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%Fig. 1 Four levels of participation in vegetable marketsⒸ ISERD

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The level of SAC members’ market participation is higher than that of non-members; thedifference is statistically significant at the 5 percent level. The average market participation score ofSAC members is 23.4, whereas that of non-members is 16.8 (Table 2).
Table 2 Comparison of market participation level between SAC members and non-members
Dependent variableMembersMarket participation score
23.4
Note: ** statistically significant at the 5% level

Non-members

Differencet-test

16.8

6.6**

1.97

The logit regression model was used to determine the factors influencing the probability of sellingvegetables to SAC; Table 3 presents the regression results. The fit of the data is statistically significant
at the 5 percent level; the concordant is R2=0.22. The results indicate that the specific regressors are 22percent able to explain the probability of selling vegetables to SAC. The main income source(vegetables are a primary source of household income), which is positively statistically significant at
the 10 percent level, relates to the probability of selling vegetables to SAC. A natural increase in mainincome implies a higher probability of selling vegetables to SAC. Six other variables positively affectthe probability of selling vegetables to SAC but the results are not statistically significant. Those
variables are age, education, male household head, family size, farm size and vegetable prices. Threeother factors that negatively affect the probability of selling vegetables to SAC, and are also notstatistically significant, are married status, dependency ratio and distance to main market.
Table 3 Logit model results for factors influencing the probability of SAC members sellingvegetables to SAC
Variable

Definition of variables

Coefficients

Std.Error

Z-valueP-valueAge

Age of household head

0.026

0.038

0.680

0.497

Education

Number of years household headattended school (years)

0.193

0.121

1.590

0.112

MaleMarriedHousehold head is male (dummy)
Household head is married (dummy)

15.407-16.909

1836.572
1836.572

0.010-0.0100.993
0.993

Family size

Number of family members
Dependency ratio (adults aged 1565 years)

0.253

0.183

1.380

0.167

-0.7650.827-0.930

0.355

0.000

0.000

0.520

0.605

1.221

0.695

1.760

0.079

0.000

0.000

1.190

0.236

-0.1360.147-0.9200.356

Dependents
Farm size

Area of cultivated land (m2)Vegetable price

Vegetable production is primarysource of household income(dummy)Vegetable price (riel per kg)

Distance

Distance to main market (km)Major income

Constant-3.2933.089-1.0700.286
Note: Number of observations 64; X2= 18.55 (P<0.05); log likelihood = -33.54 (P<0.05); concordant R2=0.22

Factors Affecting Market Participation of SAC Members
In estimating the determinants of the extent of market participation, the tobit model involved nine
regressors (Table 4). Chi-square of 75.21% at the 1% level of significance implies a good fit between
the model and data. The log likelihood is -137.14 at the 1% level of significance; the R2 of 0.22
signifies that independent variables account for 22% of the variability in the level of marketparticipation. Education of household head, which has a positive sign, is significant at the 5% level; aⒸ ISERD170

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unit increase in the level of education will increase the level of market participation by 60%. Receipt ofmarket information, which has a positive sign, is significant at the 5% level. Members who receive
market information are at least three times more likely to take market participation more seriously thanthose who receive none at all. Vegetable production, which has a positive sign, is significant at the 1%level; a unit increase in vegetable production will increase the level of market participation by 1%.
Distance to main market, which has a positive sign, is significant at the 5% level, meaning a 1 km
increase in distance will increase the level of market participation by 68%. Because SAC cannot buy
all the vegetables its members produce, farmers nearly always have to travel to sell their produce atmore distant markets such as the Svay Rieng market and other district markets, where they get higher
prices. If members sell their produce to wholesalers at the farm gate, they receive lower prices than ifthey were to sell directly on the main market. Supplying SAC, which has a positive sign, is significant
at the 1% level. Members who supply vegetables to SAC are at least six times more likely to takemarket participation more seriously than those who do not. Two variables that positively affect thelevel of market participation but are not statistically significant are family size and vegetable prices.
Four variables that negatively affect the level of market participation and are also not statisticallysignificant are male household head, main income source, farm experience and number of training
subjects.
Table 4 Tobit model results for factors affecting market participation of SAC members
Variable
Education

Definition of variables
Number of years of household head attended
school (years)

Coefficients

Std.Error

Z-valueP-value

0.605

0.283

2.140

0.040

Family size

Number of family members (person)

0.416

0.492

0.850

0.403

Male

Household head is male (dummy)-1.7183.871-0.4400.660

Market information

Receipt of market information (dummy)

4.666

2.247

2.080

0.046

Main income

Vegetable is primary source of householdincome (dummy)-0.2591.984-0.1300.897

Farming experience

Years of growing vegetable (years)-0.0470.105-0.450

0.657

Vegetable
production
Training

Total amount of vegetable production(kg/m2)
Number of training subjects covered

0.014

0.001

10.3900.000-0.2460.671-0.3700.716

Distance

Distance to main market (km)

0.681

0.298

2.280

0.029

Vegetable price

Vegetable price (riel per kg)
Members selling vegetables to SAC(dummy)

0.000

0.000

0.700

0.490

6.479

1.901

3.410

0.002

-3.5055.366-0.6500.518

Supply to SAC
Constant

Note: Number of observations 44; X2= 75.21 (P<0.01); log likelihood = -137.14 (P<0.01); concordant R2= 0.22

CONCLUSION
The study found that the vegetable market participation of SAC members is better than that of nonmembers. Vegetables are the primary source of household income, which is positively related to theprobability of selling vegetables to SAC. The study identifies five factors that affect effective market
participation: 1) education level of household head, 2) receipt of market information, 3) amount ofvegetable production, 4) distance to main market, and 5) the extent to which farmers supply vegetables
to SAC. The analysis emphasises the importance of agricultural cooperatives in improving farmers’participation in vegetable markets. Moreover, the insights into the factors that affect the probability ofⒸ ISERD

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selling vegetables and the level of market participation can usefully contribute to improving the royal
decree and prakas on agricultural cooperatives in Cambodia.
REFERENCES
Chea, S. 2010. Final report on policy analysis. Department of Agricultural Extension, Phnom Penh, Cambodia.
Gani, B.S. and Adeoti, A.I. 2011. Analysis of market participation and rural poverty among farmers in northernpart of Taraba State, Nigeria. Journal of Economics, 2 (1), 23-36.
MAFF. 2013. Annual report of Ministry of Agriculture, Forestry and Fisheries. www.maff.gov.kh.
Viet Nam News, 2010. An Giang to tap Cambodian vegetable market.” http://vietnamnews.vn/economy/ 198341/
an-giang-to-tap-cambodian-vegetable-market.html.

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