Insights into agricultural decision making and firm performance : three essays on the adoption of pesticide safety measures, good management practices, and mergers and acquisitions
Authors:   , Owusu Ansah Michael 
Published: November 2024

This dissertation explores critical aspects of agricultural decision-making and firm performance through three distinct essays. The agricultural sector faces numerous challenges, including adopting safe and sustainable practices, improving productivity, and enhancing firm performance. Cooperatives play a pivotal role in shaping these outcomes by enabling collective action, reducing transaction costs, and providing strategic advantages through pooled resources. This dissertation investigates these aspects by focusing on pesticide safety measures, Good Management Practices (GMPs), and mergers and acquisitions (M&A) within cooperatives. Utilizing frameworks such as the diffusion of innovations theory, production theory, economies of scale, and behavioral economics, the research highlights how cooperatives facilitate the adoption of new practices and improve efficiency, driving the adoption of crucial agricultural practices and the strategic decisions shaping cooperative firm performance. Focusing on U.S. farm cooperatives, the first essay investigates the impact of mergers and acquisitions (M&A) on the total factor productivity of sampled U.S. grain marketing cooperatives from 2004 to 2020. Utilizing a system Generalized Methods of Moments (GMM) model to address input heterogeneity and selection bias, the findings indicate that M&A did not significantly influence U.S. grain cooperative productivity. This aligns with previous studies showing mixed effects of M&A on cooperative performance. Post-M&A, cooperatives may struggle with integrating acquired assets, technologies, and production processes, leading to temporary slowdowns or increases in productivity. This highlights the importance of developing strategies to minimize potential productivity setbacks or enhance productivity growth resulting from M&A activities. Furthermore, the study shows higher productivity in exporting cooperatives and decreasing productivity in those exiting the U.S. grain marketing cooperative sector, with an overall increase in the average productivity of the sampled cooperatives over the study period. Shifting focus to Peru, the second essay analyzes the adoption and intensity of personal protective equipment (PPE) use among a sample of nearly 12,000 crop farmers. This study identifies the factors that condition PPE use and its intensity, with special attention to crop specialization. Using an econometric hurdle model that separates the decision to adopt PPE from the decision on how many PPEs to employ, results show that about a third of the sample farmers did not use any PPE when applying pesticides. Among those using PPE, average use intensity was relatively low at two PPEs, with boots being the most used, followed by masks and gloves. The decision to adopt PPEs was strongly influenced by farmers' education level, access to credit, and training on pesticide use. These factors were also positively associated with PPE use intensity, which was further driven by cooperative membership. Crop specialization significantly influenced both PPE adoption and intensity. Interventions to promote PPE use should target farms with higher cereal specialization, as these were less likely to use and intensify PPE adoption. Other pathways include improving farmers' education, communicating pesticide use information, alleviating credit constraints, and strengthening farmer organizations. Lastly, the third essay investigates the adoption patterns of Good Management Practices (GMPs) and their influence on livestock production efficiency among Peruvian sheep farmers. Using data from the 2022 Peruvian National Agricultural Survey, a hierarchical cluster analysis groups farms into different stages of GMP adoption, following Rogers' (1962) technology adoption curve. Stochastic frontier and meta-frontier analyses evaluate farms' within-group technical efficiency and their efficiency relative to the "best" available technology. The results indicate a positive association between GMP adoption and technical efficiency. Farms at advanced stages of GMP adoption are closer to the "best" practice production technology. Although farms at various stages effectively utilize their production potential, enhancing GMP adoption among those at lower stages could significantly improve performance. This study emphasizes the importance of farmer-centric approaches in technology dissemination and the potential of GMPs to boost livestock production efficiency. It suggests that targeted policies and interventions, such as facilitating knowledge exchange through farm visits, could support farmers at different stages of GMP adoption, promoting sustainable agricultural development in Peruvian sheep farming. The findings offer practical implications for policymakers, agricultural advisors, and cooperative stakeholders to enhance the sustainability and competitiveness of the agricultural sector. They underscore the imperative for targeted interventions and collaborative efforts to enhance agricultural practices, safeguard human health, and bolster productivity across diverse agricultural landscapes, highlighting the crucial role of cooperatives in agricultural decision-making.