Do cooperatives improve farmers’ income and sustainable agricultural innovation? Evidence from dragon fruit farming in Vietnam

Abstract

To promote sustainable and efficient agricultural development, cooperatives play a crucial role in helping farmers access inputs, markets and technologies. This study aims to provide empirical evidence on how cooperative participation enhances both economic outcomes and sustainable farming behavior in Vietnam's dragon fruit sector, an export-oriented yet under-researched crop. The study employs household survey data collected from dragon fruit farmers in Binh Thuan Province, comparing cooperative members and non-members in terms of VietGAP certification, technology adoption, production costs and income per hectare. To address potential selection bias, Propensity Score Matching and Endogenous Switching Regression/Probit models are applied. Results reveal that cooperative membership significantly increases the likelihood of adopting resource-efficient technologies and complying with food safety standards. Moreover, members achieve higher income per hectare and improved production efficiency. Cooperatives help reduce technical and financial constraints, coordinate resources and provide policy and market information that support sustainable agricultural transformation. This study is limited by its use of cross-sectional data, which restrict the ability to capture changes in farmers’ behavior and fully address endogeneity over time. Additionally, the findings may have limited external validity, as the analysis focuses on dragon fruit farmers in Binh Thuan province and may not represent other regions in Vietnam. By empowering smallholders and improving their resilience to market and climate risks, cooperatives contribute to safer, more inclusive and environmentally sustainable food systems in Southeast Asia. This study contributes to the literature by examining the dual impact of cooperative membership on both farm income and the adoption of sustainability-related innovations, an area often overlooked in prior research. Focusing on Vietnam’s export-oriented dragon fruit sector, it provides new empirical evidence on how cooperatives support sustainable practices and compliance with standards such as VietGAP. Methodologically, the study addresses selection bias using rigorous econometric approaches, offering more reliable and policy-relevant insights into the role of cooperatives in promoting both economic and environmental outcomes.