Factors affecting farmers’ decision to join coffee producer cooperatives to improve their welfare

Purpose. The aim of this research is to evaluate the farmer characteristics, knowledge, social and economic factors that influence the decision to join a cooperative, as well as its impact on farmers’ welfare. By identifying factors that affect farmers’ decision making, agricultural policies especially regarding cooperatives, will be optimised for development. Methodology / approach. This study was conducted at a Coffee Farmer Producer Cooperative in Tana Toraja, South Sulawesi Province, Indonesia. The sample consisted of 70 respondents from all members of the cooperative. The collection of data was done through the distribution of questionnaires, and the data were analysed using a statistical analysis method, namely Partial Least Square-Structural Equation Modeling with the software SmartPLS4.0. Results. Research found that agricultural policies implemented through corporate farming in the form of cooperatives improves the quality and capabilities of members, provides production capacity, and increases production, processing, and marketing. Furthermore, the result of the analysis proves that farmer characteristics, knowledge, social and economic factors have a positive and significant impact on the decision to join a cooperative, as well as a positive and significant impact on farmers’ welfare. The indicators with the strongest correlation with farmers’ characteristics are farming experience and age. The indicators that are most closely related to knowledge are the purpose and functions of the cooperative. The indicators that are most strongly linked to social factors are group support and sources of information, and to economic indicators are the availability of infrastructure and production capacity. Thus, the decision to join a cooperative has a positive impact on improving farmers’ welfare. Originality / scientific novelty. This study highlights comprehensive aspect of farmers’ decision to join cooperatives that has not been adequately studied in previous research. This study presents a new perspective that enriches the discussion in previous studies that only focused on the impacts of cooperative on farmers’ welfare without exploring the factors that influence it. Practical value / implications. The results of this study indicate recommendations for the stakeholders especially the government, to support the development of farmers’ institutions in order to optimally empower farmers. The government is supposed to take concrete steps by facilitating education about cooperatives, simplifying administrative processes, and improving infrastructure to encourage farmers to join cooperatives, and ultimately improve their welfare.