Farmer cooperative fever and collective environmental action: Evidence from China's Rural Human Settlements Improvements

Collective environmental action is crucial for building sustainable waste management systems, especially in backward rural communities, but it is highly prone to the collective-action dilemma. While previous studies have emphasized the role of farmer cooperatives, concrete empirical evidences have been lacking. To fill this research gap based on the survey data from 1820 rural households and the registration data of 1106 corresponding cooperatives we examine the influence of farmer cooperatives on local collective environmental action such as manure recycling, waste sorting and wastewater treatment in the context of China's Rural Human Settlements Improvements Initiative. Our results show that a mere 1% expansion in the size of local farmer cooperatives will increase the probability of household participation in manure recycling, waste sorting, and wastewater treatment by 4.4%, 5.6%, and 12.6%, respectively. The establishment of farmer cooperatives not only enhance institutional trust but also eases local financial constraints, thereby facilitating collective environmental action. Moreover, our heterogeneity analysis shows that the effectiveness of farmer cooperatives in promoting local collective action will be compromised by the emergence of elite capture (cooperatives with great ownership concentration) and shell cooperatives (cooperatives without actual agribusiness). These findings underscore the importance for policymakers to foster the development of cooperatives to improve rural waste and resource management.