The Role of Cooperatives in Brazilian Agricultural Production

Much of the established literature on agricultural cooperatives describes their myriad contributions to farmers' economic performance. In Brazil, one of the world's leading agricultural exporters, there were more than 1500 agricultural cooperatives with 1 million members in 2020, and in 2017, 11% of all Brazilian farms were associated with one of these cooperatives. In this paper, we estimate the factors associated with the municipality share of cooperative membership (MSCM) and how municipality-level production value changes with MSCM. Our analysis is at the municipality level using aggregate data from the 2017 Agricultural Census. We find that in Brazil, higher education and smaller property sizes are associated with membership in agricultural cooperatives. To estimate how MSCM is associated with farm profits, we use a generalized propensity score and find that an increase in MSCM increases net municipal farm income, driven mostly by an increase in the value of agricultural production compared to a smaller increase in the cost of production.