An Analysis of Farmer Professional Cooperative Members' Participation Behavior, Effects, and Mechanisms of Action

I. Problem Statement

The development of farmer professional cooperatives is theoretically conducive to raising the degree of farmers' organization, protecting farmers' interests, and enhancing the comprehensive benefits of agriculture. However, to truly protect and enhance farmers' interests through cooperatives, it is necessary to rely on the active participation of farmer members to promote the normal conduct of the cooperative's production and business activities. Farmer professional cooperative members' participation behavior encompasses three dimensions: business participation, capital participation, and management participation, with members respectively playing the roles of patron, owner, and manager. Among these, members' business and capital participation can enable members to obtain decent economic returns, but if ordinary members' participation behavior is limited to this, the economic returns members obtain through the cooperative may not be stable and may at any time be encroached upon by core members. For example, core members such as the cooperative's board of directors and supervisory board can, by increasing their holdings of cooperative shares, distribute most or even all of the cooperative's surplus as dividends based on share capital. Therefore, cooperative members need to safeguard their legitimate returns through management participation behaviors such as participating in the members' (representatives') assembly, voting to elect members of the cooperative's board of directors and supervisory board, and deciding on major investment projects of the cooperative. Members' management participation is also where the cooperative fundamentally differs from other types of enterprise organizations such as companies, although management participation behavior does not necessarily bring members direct economic returns. For China, which is still in the early stage of farmer professional cooperative development, where cooperative knowledge is not yet widespread and farmers lack democratic practice, members place greater emphasis on obtaining direct economic returns and care little about major decision-making matters of the cooperative and the cooperative's future development. This may affect members' participation behavior, and in turn affect their returns and satisfaction in the cooperative.

This paper attempts to explore the influence of members' capital, business, and management participation behavior on member returns and member satisfaction, empirically analyzing the mechanism of action through sample analysis, in order to answer how members' participation behavior affects members' returns and satisfaction.

II. Member Participation Effects and Research Hypotheses

In the field of organizational behavior, when scholars study issues such as perceived organizational justice and employee psychological contracts, they choose subjective and objective indicators such as employee satisfaction, work (task) performance, and organizational citizenship behavior as organizational effect variable indicators. The measurement of cooperative member participation effects likewise includes both objective-dimension economic return indicators and subjective-dimension utility and feeling indicators.

(1) Member Returns

In the process of participating in farmer professional cooperatives, members obtain certain returns, and these returns are the result of members' participation behavior, encompassing economic and non-economic dimensions. For example, by joining cooperatives, many women gain increased self-confidence, improved work skills, higher social status at home, fewer disputes with neighbors, and more mutual-aid behavior; these are all typical manifestations of non-economic returns that are difficult to measure monetarily. The member returns referred to in this paper will be limited to economic returns that can be measured monetarily, namely the net agricultural production and operation income that farmers obtain through participating in cooperatives. This includes the net income members obtain from selling agricultural products through the cooperative, as well as share dividends members receive from the cooperative and rebate income based on patronage volume. Further, this paper proposes

Hypothesis 1: Member returns will be positively affected by their capital, business, and management participation behavior, and compared with members' management participation behavior, members' capital participation and business participation will more noticeably affect member returns.

(2) Member Satisfaction

In the process of participating in cooperative affairs, farmer professional cooperative members gradually form perceptions and evaluations of the cooperative, and in particular form their own judgment as to whether the cooperative has satisfied their expected goals (functions), giving rise to the issue of member satisfaction. However, unlike previous research in which some scholars studied it as a cooperative organizational-level performance indicator, this paper considers the member satisfaction variable at the member level. In previous research, Guo Hongdong, Yuan Luming, and Lin Di, in their study of member satisfaction, already found that member income has a positive effect on member satisfaction, and studying employee participation and satisfaction issues from the perspective of management participation is also relatively common. Further, this paper proposes

Hypothesis 2: Member satisfaction is affected both by the returns obtained from the cooperative and by members' management participation behavior, and the effect of members' management participation on member satisfaction is greater than its effect on member returns.

III. Path Analysis

To test the complex relationships of the effects of members' capital participation, business participation, and management participation on member returns and member satisfaction, and based on previous research experience in theoretical circles, this paper attempts to introduce the structural equation modeling method to analyze the mechanism of action among multiple variables. The structural equation modeling method has advantages such as allowing the simultaneous handling of multiple endogenous variables, allowing measurement error in variables, allowing variables to be composed of multiple observed indicator variables (that is, allowing variables to be latent variables that cannot be directly measured), allowing the use of more flexible measurement models, and allowing the design of complex variable relationship models. Since the 1970s, structural equation modeling methods and software have developed rapidly, and in recent years structural equation modeling has also been applied and promoted in research on farmer professional cooperatives.

The model to be applied in this paper is an important component of structural equation modeling——path analysis. Path analysis is composed of a causal combination of a set of linear system equations among observable variables, and its main purpose is to test whether there is a causal relationship between variables, as well as the relationship diagram of direct and indirect effects among variables. The particularity of path analysis lies in that it has only observed variables and no latent variables.

(1) Analytical Model

Based on the research hypotheses proposed above, this paper proposes the inter-variable path analysis hypothesis model shown in Figure 1, and this model can be expressed by the following four sets of linear equations:

Among them, it represents a variable, and in the above system of equations it may serve as either an independent variable or a dependent variable. It represents a path coefficient; in order to distinguish different path coefficients, generally the subscript of the dependent variable of that path is used as the first subscript of the path coefficient, and the subscript of the independent variable of that path is used as the second subscript of the path coefficient. In addition, it represents the residual term of the equation.

This paper uses SPSS14.0 software to conduct descriptive statistics and correlation analysis on the sample, and uses the structural equation modeling software AMOS 6.0 to conduct path analysis testing on the proposed hypothesis model, in order to test whether the hypotheses are supported by the sample data.

(2) Sample and Variable Description

The data used in the empirical analysis come from field surveys conducted in 2009 in Zhejiang Province and Sichuan Province targeting farmer professional cooperatives and their members, among which the survey of the cooperative's sample members basically adopted the simple random sampling method, obtaining a total of 357 original member questionnaire data. After excluding member questionnaires from flower and nursery stock cooperatives as well as a small number of member questionnaires with distorted or incomplete key indicator data information, this paper's empirical analysis actually uses a total of 309 questionnaires. To verify the path analysis hypotheses, this paper compiles the member capital, business, and management participation behavior, member returns, and member satisfaction variables from the 309 member sample data into multi-category ordinal variables.