The Impact of Shell Cooperatives on Farmers' Income: Analysis Based on Chinese Grain Farming Cooperatives

Yang Yang^1*Zongzhi Liu^2*

• ¹Nanjing Agricultural University, Nanjing, China
• ²Anhui University of Finance and Economics, Bengbu, China

Farmers' professional cooperatives play a crucial role in bridging small-scale farmers to broader markets and offering an important mechanism for increasing the livelihood and source of income of the farmers. However, issues related to irregular development have gradually emerged during their evolution that are constraining the full realization of their intended functions. Using data from the National Fixed Point Survey (2014–2017) and the China Academy for Rural Development–Qiyan China Agri-Research Database, this study matches micro-level data on grain farming cooperatives with village locations based on geographic coordinates. The analysis focuses on assessing the impact of irregular development—represented by shell cooperatives—on farmers' income levels. Empirical findings reveal that: (1) The proportion of grain farming shell cooperatives exerts a significant negative effect on total household income, a result confirmed through a series of robustness tests; (2) Shell cooperatives primarily influence household operating income by affecting both the amount of land leased and the level of household subsidy income, which in turn reduces total income; and (3) The adverse impact of shell cooperatives is more pronounced among low-income households and those mainly dependent on operating income. These results provide important empirical support for government initiatives aimed at eliminating shell cooperatives and offer valuable insights for promoting the healthy and regulated development of agricultural cooperatives in China.