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Agricultural Systems xxx (2014) xxx–xxx Contents lists available at ScienceDirect Agricultural Systems journal homepage: www.elsevier.com/locate/agsy Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China Huan Yang a,b,⇑, Laurens Klerkx a, Cees Leeuwis a a Knowledge, Technology and Innovation Group, Wageningen University, The Netherlands b Center for Chinese Agricultural Policy, Institute for Geographical Sciences and Natural Resources Research, Chinese Academy of Sciences, China a r t i c l e i n f o a b s t r a c t Article history: This article takes an innovation intermediary perspective to examine farmer cooperative’s (FC) roles in Received 10 September 2012 facilitating agricultural innovation and its positioning in the agricultural innovation system (AIS). The Received in revised form 25 October 2013 article draws experiences from the rapidly emerging FC field in China. Three cases are selected to cross Accepted 20 February 2014 check findings from them and innovation journey analysis is used within each case to understand FCs’ Available online xxxx engagement in innovation processes. The findings show that FCs cover a wide range of knowledge inter- mediation and innovation intermediation functions identified by the literature. FCs recognize the impor- Keywords: tance to connect technical, social and economic dimensions of farming practice and provide Farmer cooperatives Innovation intermediaries corresponding services to link farmers to relevant actors, like extension agencies, research institutes Network building and supermarkets. Though they mainly work through bilateral relationships as opposed to acting as a Agricultural innovation systems systemic intermediary, they could take the role of coordinator in the service system and bridge the gap between the research and policy system and everyday farming practice, especially in the absence of a systemic coordinator. However, their legitimacy as intermediary might be challenged due to the potential conflicts with governments, market actors or their members, and their local position may pro- vide insufficient clout for developing durable relationships with relevant actors. Ó 2014 Elsevier Ltd. All rights reserved. 1. Introduction 2010). The AIS approach thus recognizes that innovation is a pro- cess in which technological developments are combined with In recent years, the concept of agricultural innovation system new organizational and institutional arrangements, which imply (AIS) has gained currency as way to understand how agricultural that new forms of coordination within a network of actors is key innovation takes place, and how innovation can best be supported (Leeuwis and Aarts, 2011; Smits, 2002). (see e.g. Hall et al., 2003; Klerkx et al., 2010; Morriss et al., 2006; To enhance AIS functioning it is important to stimulate the build- Spielman et al., 2008). An AIS is defined as a system that consists ing of linkages between heterogeneous actors and making their sub- of a wide range of actors from the public, private and civil sector sequent interactions effective in terms of joint learning, changing to bring new products, new processes, and new forms of organiza- practices, and shaping new institutional arrangements (Hounkon- tion into economic use, together with the institutions and policies nou et al., 2012; van Rijn et al., 2012), and actors who span bound- that affect the way different agents interact, share, access and ex- aries between different actor groups and act as systemic ‘innovation change and use knowledge (World Bank, 2006). Although there is intermediaries’ have been found essential for this (Eastwood et al., much emphasis on knowledge creation, exchange and use in the 2012; Klerkx et al., 2010; Kristjanson et al., 2009; Morriss et al., above definition of AIS, innovation systems need to fulfil several 2006). An innovation intermediary has been defined as ‘an organiza- other functions that are essential for innovation. These functions tion or body that acts as an agent or broker in any aspect of the inno- include fostering entrepreneurial driven activity, vision develop- vation process between two or more parties. Such intermediary ment, resource mobilization (e.g. capital), market formation, build- activities include: helping to provide information about potential ing legitimacy for change, and overcoming resistance to change by collaborators; brokering a transaction between two or more parties; means of advocacy and lobbying (Hekkert et al., 2007; Klerkx et al., acting as a mediator, or go-between, for bodies or organizations that are already collaborating; and helping find advice, funding and sup- ⇑ Corresponding author at: Center for Chinese Agricultural Policy, Institute for port for the innovation outcomes of such collaborations’ (Howells, Geographical Sciences and Natural Resources Research, Chinese Academy of 2006, p. 720). The provision of brokerage and mediation functions Sciences, China. Tel.: +86 13554043716. may often not be the primary role of an innovation intermediary E-mail address: yanghuan11180@163.com (H. Yang). http://dx.doi.org/10.1016/j.agsy.2014.02.005 0308-521X/Ó 2014 Elsevier Ltd. All rights reserved. Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 2 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx as Howells argues, because these, for example, ‘also cover more tra- 2.1. The innovation intermediary and its functions ditional contract research and technical services which involve no third-party type collaboration’ (2006, p. 726). Previous research Innovation intermediary is a widely used concept in innovation has shown that wide range of actors from public, private and civil studies and has also been described in terms like network broker sectors can take on such innovation intermediary roles, doing bro- or boundary organization (Howells, 2006). The innovation kering both as a core activity (these specialized organizations have intermediary role in agricultural innovation has traditionally been been coined ‘innovation brokers’) and as only one activity within a attributed to agricultural extension, which originally was seen to range of other activities (Kilelu et al., 2011; Klerkx and Leeuwis, act as a bridge between science and farming practice, but now 2009a). For example, brokering multilateral linkages in AIS has been extension is called upon to expand its mandate and act as a systemic coined as a new or additional role for extension services (Christop- intermediary coordinating a pluralistic advisory service system and los, 2010; Sulaiman and Davis, 2011; World Bank, 2012). agricultural innovation systems (Christoplos, 2010, 2012; Rivera Farmer cooperatives (FC) are a more formalized way of organiz- and Sulaiman, 2009; Sulaiman and Davis, 2011). Systemic interme- ing collective action of farmers (Hellin et al., 2009), and exist at vil- diaries do not simply operate in bilateral relations, but broker more lage, regional, national and even international level (Bijman and complex relationships, like ‘‘many-to-one-to-one’’, ‘‘many-to-one- Ton, 2008). They have been found to link different actors and bring to-many’’ or even ‘‘many-to-many-to-many’’ in distributed innova- synergy to agricultural innovation efforts (Clark, 2002; Gouët and tion networks (Howells, 2006). The literature identifies several roles Van Paassen, 2012; Klerkx et al., 2009; Poulton et al., 2010; Wenn- for innovation intermediaries to support innovation processes (see ink and Schrader, 2007; World Bank, 2006), combining innovation Fig. 1). Knowledge intermediation is an important part of innovation intermediation with other kinds of services, like input supply and intermediaries’ roles (Kilelu et al., 2011). Knowledge intermediation collective marketing (Carney, 1996; Hussein, 2001; Ito et al., relates to some functions of classical extension services, but also in- 2012; Wennink and Heemskerk, 2006). Few researches have taken cludes broader functions beyond technology dissemination (Rivera an innovation intermediary perspective to examine FCs’ roles and and Sulaiman, 2009), since knowledge is considered to be contex- position in the AIS. To fill this gap in the literature, the goal of tual and co-constructed by stakeholders rather than a fixed ‘prod- the article is to investigate what are the intermediation functions uct’ transferred from producers to users (World Bank, 2006). served by FCs and how the different functions influence FCs’ posi- Knowledge intermediation is hence about facilitating knowledge tion as intermediary in the innovation system. Besides adding to co-construction. We identify three functions of intermediaries for the body of knowledge on the functions of FCs, it also aims to con- effective knowledge production and use (Kilelu et al., 2011; Krist- tribute to the still unanswered question whether innovation inter- janson et al., 2009; Schut et al., 2011): (1) Articulating and voicing mediation is best fulfilled by a specialized dedicated organization demand of users: articulating needs and demands in terms of tech- (innovation broker) or whether it can be done as one activity nology and relevant knowledge, and voicing the demands to direct amongst other activities (Klerkx et al., 2009). innovation support services from research, advisory, and training This article draws on experience from the rapidly emerging FCs organizations (matching demand and supply); (2) supplying infor- sector in China (see e.g. Deng et al., 2010; Zhao and Develtere, mation for problem solving and responding to users’ needs; (3) 2010). Section 2 provides a conceptual framework to analyze engaging and supporting actors (farmers, researchers) in participa- functions of innovation intermediaries and delineates issues tory knowledge generation through facilitating demand led concerning their positioning in the AIS. Section 3 introduces the re- research or articulating experimental/local knowledge. search methods. Section 4 presents data on three case FCs which Given that the innovation systems perspective emphasizes the actively engaged in innovation activities and analyzes the findings importance of other resources for innovation besides knowledge from the cases. The last section discusses the key points from the (Hekkert and Negro, 2009), innovation intermediaries need to em- research and gives implications for FC policy in China. brace wider functions to bring together all the necessary actors and resources and thus foster conditions for innovation (Howells, 2. FCs as innovation intermediaries: functions and positioning 2006; van Lente et al., 2003): (1) building visions on the scope and in agricultural system nature of innovations contemplating new technology, market arrangements, value chain models, etc.: this includes identifying This section will provide a conceptual framework to understand opportunities and constraints, and coupling expectations of differ- FCs’ functions in innovation intermediation and how positioning ent actors; (2) building and managing networks with actors from influences their functioning. different domains: facilitating linkages between potential Innovation intermediation Knowledge intermediation • Articulating and voicing demand of • Building visions on the scope and users’ needs nature of innovations • Supplying information for problem • Building and managing network with solving and responding to users’ actors from different domains needs (classic extension services) • Facilitating and participating in • Engaging and supporting actors in learning process joint knowledge production Positioning influencing intermediary’s functioning, like its legitimacy, funding raising capacity, operation level … Fig. 1. Possible functions of intermediary and influencing factors. Sources: Based on Schut et al. (2011), complemented with van Lente et al. (2003), Howells (2006), Klerkx and Leeuwis (2008), Kristjanson et al. (2009), Kilelu et al. (2011) . Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx 3 collaborators as well as other actors that need to be involved a membership organization representing farmers to improve their because of their enabling or constraining position in the innovation position in production and commercialization (Rondot and Collion, system by means of scanning, scoping, filtering and matchmaking of 2001). So it can be seen to be in a representation or gatekeeper posi- actors; (3) facilitating and participating in learning processes: tion for farmers in its relations with other actors (cf. Fernandez and creating conditions for and participating in learning-by-doing, Gould, 1994). An FC is not a specialized innovation broker, as it com- learning-by-using, learning-by-interacting and learning-by- bines innovation intermediation with other functions, like input searching. and credit supply, and collective marketing (Poulton et al., 2010; Wennink and Heemskerk, 2006). 2.2. FCs as innovation intermediaries and their positioning in the agricultural innovation system 3. Research methods As innovation intermediaries fulfil liaison positions, and stand The research reported in this paper used a case study approach between many actors, they gain influence from being accountable to understand the innovation intermediary functions served by to different actors, and they need to balance these accountabilities FCs. As innovation is a dynamic and situated phenomenon, case to be able to create a legitimate position (Fernandez and Gould, studies are an deemed apt approach (Klerkx et al., 2010), as they 1994; Williams, 2002). This balancing of accountabilities is not easy, are suitable to explore and explain the ‘what questions’ and ‘how and innovation intermediaries may face legitimacy tensions as they questions’ this study addresses (Yin, 2009). Three cases were pur- generally confront diverging and conflicting interests and face posefully selected to represent different types of FCs classified by accountability conflicts due to multiple demands directed towards Yang (2013) according to the services provided by FCs and their them (Klerkx et al., 2009; Klerkx and Leeuwis, 2009b). Innovation connection with rural communities and cross check findings from intermediaries can take in this a relatively neutral position, not them. In China, FCs recently emerged in the 1980s and mainly choosing a particular view or interest, but they may also take a operate at village level (Deng et al., 2010). Case 1 (Funong Vegeta- non-neutral position, advocating or representing certain interests ble Cooperative) deals with a specialized technology services pro- (including their self-interest) (Kimble et al., 2010; Obstfeld, 2005). vider which mainly engages in technology improvement to Such a non-neutral position can have implications for the types of optimize farming practices. Case 2 (Tianli Vegetable Cooperative) relationships they can engage in. They may not be able to broker falls into the type of commodity-based FC which combines techni- certain connections because of perceived conflicting commercial cal and marketing services around one or several products. Case 3 or political interests. Other tensions observed are that some people (Hongmin Farmer Cooperative) is a community-based FC which in- may not grasp their role and see them as an unnecessary in-between cludes improving agricultural production and marketing as well as in what could also be a direct relation (Klerkx and Leeuwis, 2008). A natural resource management, credit services to promote develop- third tension relates to willingness to pay: service value from their ment in rural communities. innovation intermediation activities (especially those related to Considering that the interaction between different actors in facilitation) are hard to capture and this may affect willingness- innovation is a dynamic process, innovation journey analysis to-pay of private actors and cause impatience of public funding focusing on important events provides a useful method (Klerkx sources to support them over a longer period. et al., 2010; Spielman et al., 2009). Within each case, we try to When applying the innovation intermediary concept in the con- understand case FCs’ functions through their engagement in inno- text of developing countries, Klerkx et al. (2009) suggest that differ- vation events and efforts to shape the process. The fieldwork was ent types of organizations may take up the role of ‘systemic carried out between Sept. 2009 and Sept. 2011. Both retrospective intermediary’ besides specialized organizations which specifically and real-time perspectives were taken to build the process of FCs’ position themselves as a relatively neutral ‘honest broker’ (dubbed innovation journeys depending on the cases (Hoholm and Araujo, ‘innovation broker’ – organizations which fulfill most knowledge 2011). Information was collected from different sources and kept and innovation intermediation tasks but generally do not engage updated through time. Snowball sampling was used to select the with supplying information for problem solving, technical advice, interviewees who played important roles to promote innovation input supply, research or political representation and advocacy). activities in the FCs and in the innovation networks. Semi-struc- This is because the organizational form of innovation intermediar- tured interviews were set up with FC leaders and members and rel- ies, they argue, is dependent on the specific problems to be ad- evant external actors (such as managers from export companies, dressed, different social and cultural contexts and the institutional supermarkets and researchers). The key information gained from history of the AIS in which they are embedded. An FC can be these interviews includes: the key points of FCs development, conceptualized as a non-neutral intermediary which aims to gain management structure of FCs, services provided by FCs and how a better position for farmers in the agricultural value chain and these services evolved over time, establishment and evolution of the agricultural innovation system (Hussein, 2001). Basically, it is FCs’ relations with external actors (like government, market actors, Table 1 Data sources of the study. Case FC Number of Interviewees Secondary information sources interviews Funong Vegetable 10 – Two leaders – FC website information Cooperative – Seven members – Newspaper articles and on-line – One manager from export company cooperating with FC reports Tianli Vegetable 13 – One leader – Newspaper articles and on-line Cooperative – Ten members reports – Two managers from supermarkets cooperating with FC – TV programmes about FC Hongmin Farmer 10 – Six leaders – FC activities record Cooperative – Three members – Newspaper articles and on-line – A high-profile researcher who gave strong support to FC reports activities – FC website information Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 4 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx and researchers), FCs’ members’ perspectives on these issues, do experiments to formalize the indigenous knowledge and apply external actors’ perspectives on relevant issues. Secondary data it more broadly to horticultural production. were also collected to complement interviews. Details of data Jin and Xiao received anaerobic bacteria and actinomycete from sources can be found in Table 1. Prof. Nie’s lab. They cultivated the bacteria and converted them into different products. Anaerobic bacteria were made into a fer- 4. Findings mented solution, which is mainly used to improve use efficiency of organic fertilizers, like manure, soybean cake. Actinomycete This section presents the development processes and activities was made into a bio-fertilizer for controlling nematodes. Jin fur- of the FCs in the three cases (see map in Fig. 2 for their locations). thermore experimented with medical herbs to make pesticides, FCs in case 1 and case 2 both engage in greenhouse vegetable with the help from local traditional Chinese doctors, and developed production and marketing, and are both located in a county of three formulas to tackle different plant diseases. Shandong Province, where a lot of farmers specialize in greenhouse The organic vegetable association, which re-registered as coop- vegetable production. The FC in case 3 is in a region along the erative in 2007, was initiated in 2004 to be able to attract more Yellow River in Henan province, where farmers cultivate rice to farmers to adopt the technology Funong developed. It supplied take the advantage of the irrigation system while grow multiple technical services, like problem diagnosis and pest and disease crops. First we will provide a description of the innovation jour- management trainings, and inputs. From 2009 the association em- neys (Section 4.1), followed by a deeper analysis (Section 4.2). ployed three technicians who were responsible for the field visit to farmers and delivering inputs. All farmers interviewed mentioned that they could call the association to send a technician to their 4.1. Innovation journey descriptions greenhouse or bring infected plants there for a diagnosis, and then could buy the necessary inputs to deal with it. Leaders and techni- 4.1.1. Funong Vegetable Cooperative: engaging in organic technologies cians always used these visits to explain to farmers the risks of to deal with safety problems in greenhouse vegetable production overusing chemical fertilizers and pesticides, the advantages of The Funong Vegetable Cooperative was first established as a their technologies and the importance of hazard-free crops. farmer association in 2004, aiming to promote organic vegetable To make the technologies easier for farmers to use, Funong de- production and marketing (see Fig. 3). It was initiated by Jin, a local signed technical regulations according to the organic production farmer who engaged in organic greenhouse vegetable production, standard of the Chinese Ministry of Agriculture and made them and Xiao, a graduate student from provincial agricultural univer- into booklets. These booklets gave guidance on farming proce- sity. Constraints of the association as a legal form became clear dures, and pesticide and fertilizer use. Funong also introduced after two years’ operation, including the lack of legal status in new technologies developed by other service providers. For exam- the market and the loose connection with members. Jin and Xiao ple, the cooperative experimented with a bumble bee for pollina- told that ‘‘We considered registering as a company to solve these tion supplied by a Dutch company and organized farmers to problems at first. When the cooperative law came out in 2007, it attend the company’s introductory training. Farmers who used Fu- fitted our needs at that time. We registered at the Commerce and nong’s technologies increased steadily to about 1000, but just a few Industry Bureau as the first cooperative in our county.’’ of them adopted the whole organic production package. Jin, as from 1992, realized that farmers used much highly toxic In 2007, Funong started to collaborate with an export company pesticide to control pests and diseases (like Meloidogyne, Botrytis to market members’ products. This year a quality problem in egg- Cinerea and Downy Mildew) without awareness of negative conse- plant, due to which the fruit flesh turned black, spread in the re- quences, and he became worried about this. He spent one year gion. The export company found that only products from studying in Shandong Agricultural University in 1994 to find out Funong’s members did not have the problem. Then it targeted Fu- the alternative solutions to farmers’ problems. He got acquainted nong to source eggplant, and Funong negotiated about 30% more there with Prof. Nie, a soil fertility specialist, and kept contact with per kilo (0.8 yuan, about 10 cents in US dollars) compared to the her. After that, he experimented with some farmers and started market price for its members. In this process, Funong introduced using traditional knowledge and organic methods for pest and dis- members to the company without engaging in the transaction pro- ease control, like using organic fertilizer and medical herbs as pes- cess and generating income from it. However, the cooperation with ticides. In 2002 Xiao, a student of Prof. Nie, did his bachelor thesis the export company stopped in 2009 due to the shrinking export in Jin’s village and became very interested in Jin’s ideas. Then he market as a result of the global economic crisis. co-established a demonstration site with Jin in 2002 which has The agricultural channel of the provincial TV station got to eight greenhouses (each with about a 600 m2 planting area) to know Funong’s success in dealing with the problems of farmers. It interviewed the cooperative and made a program in 2008 about its organic technology for disease control. The cooperative was also reported by other local or regional newspapers. In 2010, Funong applied for organic certification with the China Organic Food Certification Centre of the Ministry of Agriculture and got approval in 2011. This required the cooperative to take records of the cooperative’s technical services and farmers’ production pro- Beijing cess. This activity was financially supported by the Centre for Chi- Shandong Province nese Agricultural Policy (CCAP, a research institute of the Chinese Henan Province Academy of Sciences) within an action research project on FCs. Fu- nong gained this support through recommendations by local gov- ernment and because of its dedication to promoting organic production among farmers. After receiving the certification, Funong cooperated with an export company to run a trial of producing and exporting certified organic vegetables. The investor of the export company found Funong through news items about Funong in the Fig. 2. Provincial locations of selected cases. media and kept in close contact to find a chance to cooperate. In Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx 5 Table 2 Functions served by case FCs in innovation intermediation. Funong Tianli Hongmin Knowledge intermediation 1. Articulating and – – Communicated with the county Agricultural voicing demand of Bureau about the lack of non-pollution rice farmers’ needs technology and developed technical regulations together 2. Supplying information Organized trainings and supplied problem Organized greenhouse vegetable Organized non-pollution rice production for problem solving diagnoses free-of-charge production trainings trainings and provided field consultation and responding to services farmers’ needs 3. Generating knowledge Developed technical regulations for organic Created vegetable bagging technology to Developed technical regulations for non- applicable in greenhouse vegetable production through improve the safety of greenhouse pollution rice production production generating and integrating a series of vegetable technologies Innovation intermediation 4. Building vision on new Identified organic production to solve safety Targeted the high quality food market Intended to take opportunities supplied by the technology and productivity problem in existing (e.g. Supermarket) and explored and new certification system, and adopted and technology and tried to couple it with developed relevant technology developed relevant technologies farmers 5. Building and managing Linked with agricultural universities and Kept contact with local extension agency Kept contact with extension agencies, both network with actors companies for technology development and to give technical trainings and with a local and other regions, to give technical from different introduction company to improve the bags for trainings domains production Kept contact with export companies and Established partnership with local Established relationship with one supermarket consumers in marketing supermarket chains chain in Beijing and consumers from Beijing and other regions Gained reputation for the FC’ products Made FC’s bagged vegetables recognized Involved researchers, mass media, consumers through mass media and daily by supermarkets through personal and government agencies in promoting healthy communication network and mass media production and consumption 6. Facilitating and Fostered farmers’ understanding of food Fostered farmers’ recognition on food Fostered farmers’ recognition of food safety participating in safety and bio-technology safety learning process Kept farming records and prepared Prepared applications for hazard-free Prepared application for hazard-free application for organic certification certification certification 7. Providing necessary Provided a whole range of inputs needed in Provided bags to adopt bagging Provided all inputs in non-pollution rice resources and services organic vegetable production technology and run an input shop. production, but only kept seeds supply later Attained organic certification for greenhouse Gained non-pollution certification used Got non-pollution certification for rice and vegetables and monitored farmers who in bagged vegetables monitored the production process, but gave up marketed under certification later 2007 2011 2002 Received organic certification Cooperation with an export Start to develop organic company until 2008 fertilizer and pesticide 2010 2011 Received financial support Trial run of organic vegetable 2004 2007 2002 from a research institute production and export Establishment of organic Registered as Jin and Xiao set up vegetable association cooperative 2007 with an export company demonstration trial Reported upon by several mass media 2003 2004 2005 2006 2007 2008 2009 2010 2011 2002 2012 Fig. 3. Time line of major activities carried out by Funong Vegetable Cooperative. the trial run, instead of simply introducing members to export com- than 7.2 yuan/kilo. In this collaborative venture, Funong also acted pany as it did before, Funong became a formal partner in the collab- as a gatekeeper: it had contracts with members to meet the quality orative venture. Funong took the main responsibility for supporting requirements for certified organic products. This led to the situation production, offering technical services and process control. The that mainly farmers who had a lot of experience in the use of the company took charge of marketing. It offered good prices and farm- cooperative’s technology package were included. ers had the freedom to choose to sell to the market if the market price was higher than the price offered by the export company. 4.1.2. Tianli Vegetable Cooperative: targeting a higher quality market The price of vegetable fluctuated widely from season to season and bringing new technology to achieve higher quality between 0.8 yuan (about 0.12 US dollar) to 8 yuan (about 1.15 US Tianli Vegetable Cooperative was initiated in 2007 and formally dollar) a kilo. The policy of the company was that it paid farmers registered in 2008 by Liang, a local farmer who had conducted 2.4 yuan/kilo (about 0.36 US dollar) if the market price would be vegetable trading for about ten years (see Fig. 4). Based on his lower than 0.8 yuan/kilo, would pay the same as the market price marketing experience, he regarded supermarkets as an emerging if the price was between 2.4 and 7.2 yuan/kilo (about 1.03 US dol- market for high quality food products, and recognized the impor- lar), and would stop the purchase if the market price was higher tance of trademarks and certification to be able to do business with Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 6 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx 2009 2007 2010 Received non- pollution Start to organize technical Reported by provincial food certification and training with local extension agricultural TV programme government’s subsidy for it agency’s support every year Feb - Dec Jan - Jun 2011 2007 2008 Developed bagging Cooperated with two Reported by national Establishment Registered cooperative’s agricultural TV programme vegetable technology local supermarket chains of cooperative trademark 2008 2009 2010 2011 2007 2011 Fig. 4. Time line of major activities carried out by Tianli Vegetable Cooperative. supermarkets. When the farmer cooperative law was put into ef- market price, because farmers argued that it took time to put bags fect, he saw the opportunity in starting a cooperative as a legal on the vegetables and that the labour cost was thus higher. body to organize farmers. He persuaded seven greenhouse vegeta- Liang started to promote the products using the bagging tech- ble farmers in the village to found the cooperative and set super- nology with the county Agricultural Bureau. The officials were market as their target market. His investment accounted for quite interested and recommended it to the local agricultural TV more than 90% of the total working capital of the cooperative. channel and newspapers. They reported this new technology and After its establishment, the cooperative started to help farmers also included comments from experts about its advantages. Liang to improve their technologies. Tianli invited experts from the also went to the managers of local supermarket chains with sam- county public extension agency to give trainings on greenhouse ples, and two supermarket chains accepted the products. Being a vegetable production, organized about three times a year, and cooperative and having broad support clearly was an advantage, brought farmers to the trainings. In 2011, it also tried to introduce as illustrated by a quote from a purchase manager: organic fertilizer from Funong vegetable cooperative to members ‘‘Their products are reported on by newspapers and TV programs. and invited Xiao to give some guidance. The cooperative can take responsibility for their products, which In 2008, Tianli registered its own trademark, as this was consid- is not the case for individual farmers.’’ ered as key to advancing the cooperatives objectives as illustrated by the following quote from Liang: However, the cooperation with supermarkets did not last long. ‘‘Trademark and certification are essential to enter supermarkets Local supermarket chains in China mainly adopt the slotting allow- and a trend for agricultural products in general. I learnt about ance collecting approach to exercise their dominance and make a the county government policy to subsidy certification when I was profit (Li, 2009). In the Tianli case, they deducted 22–26% of the in a training course for cooperative leaders and small entrepre- shelf price directly without negotiation with Tianli. One supermar- neurs. Then I contacted the Agricultural Bureau to help us to pre- ket stopped the purchase from the cooperative after three months, pare the documents and the application took us one year.’’ due to the low sales of the bagged vegetables. Liang gradually withdrew from cooperation with the other supermarket after five months, because he lost more than 20,000 yuan (about 2900 US Hence, in 2009, Tianli applied for hazard-free certification to the dollar) from the business and could not carry it further anymore. Ministry of Agriculture and got approval. To operationalize hazard- Because Liang had the idea that he was investing in the bagging free production, Tianli took members to trainings organized by technology and others reaped the benefits, he gave up promoting government to build awareness and exchange ideas on the impor- bagging technology, but the technology is still spreading. The agri- tance of food safety. cultural channel of CCTV (China Central Television) found the tech- During the application of hazard-free certification, Liang and nology from local media and made a program with the cooperative another farmer came up with the idea of a ‘‘bagged vegetable’’, to show the development and application of the technology. When using bagging technology which was widely used in fruit protec- the program was broadcasted, Liang was surprised that farmers tion in the region to protect fruit from pests and hence lower pes- from different regions called him to consult about the technology. ticide use. They contacted a plastic bag producer to supply the bag according to their requirements and experimented with cucum- 4.1.3. Hongmin Farmer Cooperative: trying to promote village bers in the farmer’s greenhouse. Initially, the cucumber started rot- development by increasing income from agricultural production ting, so they tried to improve the air permeability of the bag by In 2004, four farmers in Hongmin village were invited to attend adding holes at the top and bottom of the bag, by changing the type training on farmer cooperative development organized by Dr. Li, a of plastic, and by choosing a proper time to coat the cucumber and. researcher from a national university and the part time deputy This experimentation took about one year. After they achieved mayor of the county (see Fig. 5). They found that cooperative could their initial objective, they also found the bagged cucumbers’ taste be a good approach to promote development of the village, and ini- had improved and its storage life had been extended. Then they tiated the Hongmin Farmer Cooperative with support from Dr. Li. designed bags in different sizes for cucumber, eggplant and towel The executive committee and supervisory board of the cooperative gourd and put the cooperative’s trademark on it. At the end of were selected by its members. The cooperative aimed to promote 2009, Liang introduced this technology in a training course to village development and organized credit provision, collective pur- cooperative members and gave support in its application. Five chase of inputs like fertilizer, seeds and piglets, and had more than farmers adopted it with the condition that Liang provided the bags one hundred members. for free and purchased the products at 0.4 yuan (about 0.12 US In the village, rice is the major cash crop in the summer season. dollar and 20% of the market price at that time) higher than the In 2005 the cooperative got to know about hazard-free certification Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx 7 2005 Received funding from 2005 MoA FC support project Received support in marketing from researchers in Beijing Mar 2006 - Apr 2007 and reported by mass media 2005 Cooperated with a super market Started to organize chain in Beijing for one year trainings to members 2005 2004 on non-pollution rice Received non-pollution Apr 2006 - Oct 2007 Establishment of food certification for rice Carried out “contract farming with consumers” cooperative 2005 2006 2007 2004 2008 Fig. 5. Time line of major activities carried out by Hongmin Cooperative. from the county Agricultural Bureau and started hazard-free rice The leaders who invested lost more than 20,000 yuan (about 2900 production and a marketing project to obtain a higher price. Based US dollar) on the pesticide. The accountant of the association men- on voluntary contributions, six farmers who mainly were coopera- tioned that the leaders could not reach agreement to share the loss, tive leaders each invested 8500 yuan (about 1200 US dollar) to and decided to discontinue the active role of the cooperative in in- start. Soon after that, Dr. Li informed the cooperative about an FC put supply. The input supply then was taken by one of the farmer supporting project which was funded by the Ministry of Agricul- agronomists as his own business, though it was still considered as ture and allocated some funds to the research team she was part of cooperative’s services. working with. Hongmin gained financial support of 10 thousand After harvest, Hongmin started marketing the rice. It purchased yuan (about 14,000 US dollar) with the proposal for a clean rice un-milled rice from members at 0.1 yuan/kilo (about 2 cents in US production project. Other members from the cooperative were dollar) higher than the market price. They firstly searched for large encouraged to invest and share the funding from the Ministry of buyers in Zhengzhou (the capital city of the province) without good Agriculture, and most of them put in a small amount, around 100 results. Then they turned to Dr. Li for help and brought ten tons of yuan (about 14 US dollar). In May 2005, the cooperative formally rice to Beijing. Dr. Li, together with other researchers and social registered the ‘‘Clean Rice Production Association’’ in the county’s activists, introduced the rice to citizens through some social activi- Civil Affairs Bureau. ties, like public lectures and promotion seminars. They stressed the Two of the leaders of the cooperative-Fan and Meng, who were social commitment of the farmers in producing healthy rice. Mass formally recognized as agronomists by the government took charge media, including newspapers and TVs, was attracted by the involve- of technical services. Fan had worked with the county extension ment of researchers and the FC in rice marketing and food safety agency for about 10 years. He was responsible for contacting the issues. Many consumers saw the news and trusted the cooperative Agricultural Bureau and preparing documents for trademark and for the quality of the rice. The cooperative started deliveries of rice hazard-free rice certification application. These applications were to consumers’ homes by members who were staying in Beijing approved before July – the start of rice season. At the same time they during this period. organized farmers for trainings on hazard-free rice production and In 2006 the cooperative found new opportunities in marketing. project management. In March, a three day training was organized In March the rice entered into a supermarket chain in Beijing with and extensionists from local and other regions’ public extension the influence from mass media and through intermediation of a agencies were invited to explain how to do hazard-free rice produc- business man who wanted to help the cooperative. Sales were good tion. More than 100 farmers attended the training. The national when they just started, but dropped down gradually because of the standard on hazard-free rice production only mentions limitations decreased attention from media and consumers. The cooperation of the kinds of chemical residues and this is not directly useable with the supermarket chain lasted for one year and Hongmin quit for farmers as a guide for hazard-free production. To better guide in 2007 because it could not make money from it. At the same time and regulate farmers, the cooperative developed a technical some consumers showed their willingness to keep long term rela- pamphlet with the county Agricultural Bureau on the hazard-free tionships with the cooperative in the home-delivery of rice. The rice farming practices. Members had to sign a contract with the leaders told this to Dr. Li and they came up with the idea of ‘‘con- cooperative about compliance with cooperative hazard-free regula- tract farming with consumers’’. Dr. Li helped the cooperative to tions and use of the inputs supplied by the cooperative. organize a consumer network in Beijing and brought consumers In the 2005 production season, about 300 farmers joined the to Hongmin village to experience rural life. The citizens signed a project. The cooperative organized farmers into groups and group contract with the cooperative and paid for the rice in advance; leaders were responsible for distributing inputs and guiding farm- the cooperative would deliver the rice after harvest to consumers. ers’ practices. The group leaders came together twice a month to ex- This model was implemented in 2006 and 2007 but stopped in change information and decide on follow-up activities. When 2008 due to the high costs of coordination and the limited number farmers encountered problems, the two farmer agronomists also of consumers involved. did field consultations. However, the cooperative met inputs provi- In 2006 and 2007, the cooperative directly provide services to sion problems in the 2006 season. Before the season, Hongmin con- members to reduce costs and risks of input supply. It set up an tracted an inputs company in Beijing for the pesticide used for input shop to supply seeds, fertilizer and pesticide required in hazard-free production. However, the pesticide sent by the com- the production, which was connected to the two farmer agrono- pany did not effectively control disease and led to a 30–50% lost in mists responsible for the technical support. This lasted until total harvest. Despite the company admitting their error and send- 2008, when the two farmer agronomists left the cooperative ing another pesticide, the loss could not be recovered and some due to internal conflicts and low profits from the project. To- farmers did not pay the cost of the pesticide to the cooperative. gether with the ending of the cooperation with the supermarket Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 8 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx chain and consumers, the cooperative stopped most of the input 4.2.2. FC’s positioning in the agricultural innovation system supply and advisory services, and only kept on supplying seeds As Section 4.1 shows, the FCs in our cases have different kinds of to farmers. relations with the different actors in agricultural innovation sys- tem depending on their capacity as innovation intermediaries 4.2. Analysis (see Table 3). Overall, the studied FCs all operate at a small scale at village level and this is in accordance with FCs’ service coverage 4.2.1. FCs’ roles in knowledge and innovation intermediation in China in general (Deng et al., 2010; Han, 2007). They supply ser- The three cases above illustrate FCs’ active engagement in inter- vices directly to individual farmers and try to connect them with mediation to innovate agricultural production and marketing in other relevant actors, like extension agencies, research institutes, China. Table 2 summarizes the intermediary functions served by and supermarkets. What could be observed is that FCs (and then case FCs according to conceptual framework outlined in Section 2. often in the person of their leaders) mainly engaged in bilateral It shows that FCs cover most of the knowledge intermediation and relationships but did not bring multiple actors directly in contact innovation intermediation functions identified in the literature as with each other; they always acted as an in-between. In making summarized in Fig. 1. connections with different ambits the FCs often mobilized actors From the descriptions in Section 4 it becomes clear that FCs’ (such as government officials and influential researchers) who knowledge intermediation activities are all organized around could act as boundary spanners for them (Table 3, item 1 and 6). broader objective – producing higher quality products to access Because the FC leaders in case 1 and 3 were found to have technical better markets. They bring new technologies into farming practice expertise they possessed a certain legitimacy and had a position to in different ways. Basically, they provide classic extension services, engage with influential boundary spanners (Table 3, item 7). How- including organizing trainings, providing personalized consulta- ever, most of the external actors are mobilized through personal tion and preparing written materials (Table 2, item 2). Going relations rather than institutionalized mechanisms. This restricts beyond this, they develop more contextualized technologies the scope of their cooperation to providing knowledge, and brings through local experiments, interpreting and integrating scientific difficulties to expanding to joint knowledge generation as analyzed knowledge (Table 2, item 3). Public standards introduced by in Section 4.2.1. government are generic, and described in abstract scientific terms. As regards their position as intermediary, sometimes they take As observed, FCs in Case 1 and 3 helped farmers to interpret stan- a neutral position when they translate for example standards into dards by developing corresponding technical guides with detailed guidelines for farmers or make contacts with service providers. guidance with integrated knowledge from different disciplines, like However, this neutrality appears to be relative, as FCs also need water, pesticide and fertilizer management. The FCs in case 1 and 2 to take into account government policies in order to be able to sup- carried out in situ experiments and introduced directly applicable port farmers and make links with sources of support (Table 3, item technologies for farmers. 5). The cases show that government gains access to farmers However, it appears that the FCs studied were not so much in- through FCs, as these organize farmers to attend governments’ volved in facilitating joint knowledge production (Table 2, item 1). trainings, and by transferring food safety policies to farmers. The technology demands were identified from consumers’ per- Sometimes FCs also act as representatives for the farmers, for spective for higher quality food and aimed to fill the gaps in farm- example in contract making with buyers. However, different ers’ farming practices, rather than focusing on problems identified degrees of farmer involvement could be observed in steering the by farmers themselves. At the same time, the FCs mainly relied on activities of the FC, which determines to what extent the voice of themselves for generating new knowledge or made use of existing the members is taken into consideration. In case 1 and 2, FCs act like knowledge provided by other knowledge providers. a private business, mainly following the interest of the main leader, As shows from the different innovation intermediation func- and farmers are more or less ‘recruited’ and there is a limited tions performed, all case FCs recognized the close connections be- involvement of members in management and finance. In case 3, tween technical, social and economic dimensions through their the community-based FC, farmers participated more in its initiation intermediation practices (Table 2, item 4), and they developed and management, but here the FC was still very weak to organize coherent visions on how to better position products from small- effective collective action and move innovation activities forward. holders on the market, and made the necessary connections to Given this sometimes weak representation, the FCs’ bargaining build the support networks to enact this vision (Table 2, item 5). power with other actors is also problematic, due to limited They developed such networks for obtaining financial support, participation and investment from members in FCs (Table 3, item 4). for R&D, training and certification, and for developing contacts with buyers and consumers. FCs represented farmers to formulate 5. Discussion and conclusion contracts with buyers, supermarkets and consumers. Hereby mass media are mobilized to introduce FCs or their products to the pub- The goal of this paper was to analyze the roles of FC as innova- lic and provide a channel for FCs to gain access to potential con- tion intermediaries. In line with earlier suggestions by Klerkx et al. sumers or buyers who they cannot access directly. However, in (2009), it has been confirmed that they take up several innovation all cases buyers like supermarkets and export companies, are all intermediation roles and contribute to linkage building within the integrated at a later stage in the innovation process and often agricultural innovation systems. These include both more ‘classi- the cooperation ends only after a short period. cal’ knowledge intermediation roles, and broader innovation inter- FCs also engaged in facilitating learning between different mediation roles. A number of broader theoretical implications can actors involved in networks (Table 2, item 6), building awareness be derived. on issues such as food safety, and translating technical and market Firstly, consistent with findings of Heemskerk and Wennink information and policies about food safety to farmers. They also (2004), the FCs studied actively engaging in generating contextual did translation work between different subsystems of the AIS by and integrated knowledge. Following Knickel et al. (2009) and Stu- facilitating paper work, like project applications, reporting and iver et al. (2004), this indicates that FC helps to fill the gap between farming records for certification, which is important to formalize segmented and fragmented expert knowledge (as present in the FCs’ activities. In all three cases, FCs provided services to support agricultural science system) and complex farm-level realities and the innovations they promoted including input supply, collective everyday farming practice. This is done both by ‘internal translation’ certification and production process management. by farmer experts in FCs who have rich experiences in farming and Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx 9 Table 3 Situation of case FCs’ relations with different actors and members. Funong Tianli Hongmin 1. Access to technology Established relations with academic FC leader mobilized personal relations to gain Gained access to local and other services institutions through long term personal local public extension agency support regions’ public extension agencies interactions of FC leaders through support of researcher and its active attitude 2. Relations with actors Linked with buyers after advantage of Linked with supermarkets after having products Linked with supermarkets after having from market products was recognized on the market to be supplied products Recognized by technical companies for Supermarkets valued its efforts in organizing Supermarkets valued its efforts in providing access to farmers and export farmers and its efforts to raise quality organizing farmers and improving food companies for better quality products safety 3. Relations with Its establishment was motivated by Its establishment and engagement in certification Its hazard-free rice production project government government policy and it was involved in were both motivated by policy and it was involved was encouraged by recognition from food safety promotion activities of in food safety promotion activities of government government government 4. Participation of FC Limited participation of farmers in Limited participation of farmers in decision Mainly key members invested in FC and members decision making and financial making and reluctance to invest in FC activities participated in decision-making contribution Generated revenue from input supply to Limited membership fee from farmers and only Limited membership fee and small support technical services and technology the leader invested investments from farmers development 5. Availability of funding Received funds from local government Received subsidy from local government for non- Received funds from MOA for hazard- from government and and research institute for promoting pollution certification application free rice production project other organizations organic production 6. Involvement and – – Strong support from researchers and support from social activists helping the FC access researchers and civil funding, mass media, consumers and so societies (beside on funding) 7. Local context based Two key leaders were well equipped with The key leader was active to get experiences from Two leaders recognized by government technology and local scientific knowledge and production other contexts, but without relevant expertise as agronomists in 1980s experts in technical experience services are familiar with scientific language but also by connecting to other son et al., 2009). In this sense it follows an approach taken also by knowledge service providers. The FCs in the cases are crucial as other representative organizations with a sector improvement ‘‘network spark plug’’ to enable such broader connections, because agenda which do have a clear normative orientation (see e.g. following the argumentation by Hellin (2012) – farmers seldom Goldberger, 2008). Although our cases do not clearly indicate con- self-organize themselves for this purpose. flicts (except the tension between leaders and members over Secondly, as regards broader innovation intermediation, the FCs’ investment in collective activities and the lack of mechanism in multi-functionality helps to bring compatibility and co-evolution public extension system to meet farmers’ technological demands), between technical, social and economic dimensions of farming, this can be a potential problem if the scope of action and the stakes and in this sense they reinforce findings by Kilelu et al. (2013) who represented of FCs become greater, and may cause the FCs to loose noted similar positive effects of ‘producer hubs’. What could be legitimacy. Here also the connection to certain government policy noted however here, is that FC did not always engage in systemic can become a problem, if government’s and farmer’s interests start intermediation by bringing together ‘many-to-many-to-many’ to diverge (reflecting earlier findings by Klerkx et al., 2006). What relationships, but rather engaged in a broad package of bilateral can also be a problem, is that leaders’ personal interests start to relationships, in which the FC acted as an integrator. Furthermore, conflict with those of members (e.g. case 1 and 2), which corre- it could be noted that they acted within a web of intermediaries con- sponds with earlier findings by Zhao and Develtere (2010) that firming the findings of Stewart and Hyysalo (2008) and Kilelu et al. while in China’s Cooperative Law supervisory mechanisms and (2013), nuancing the earlier findings of Klerkx et al. (2009) about governmental guidance for organizing FCs are contemplated, there seeing innovation intermediaries as the main central intermediary are still difficulties in applying it in practice. The lack of members’ who takes care of all relevant issues in innovation. Although FC did participation in investment and management of the FCs is one the not act in such a central way, they did fulfil the role of coordinator reasons, as showed in the three cases. Conversely the leaders are in the service system (advice, inputs, quality management, market sometimes held personally accountable for failures of others (such relation formation). This indicates that besides public extension ser- as in the case of the deficient pesticide supply in case 3). This sug- vices which could take such coordination as a new role (cf. Alex et al., gests that it could be better not to mix leadership roles of FC with 2004; Birner et al., 2009; Christoplos, 2010; Rivera and Sulaiman, innovation intermediation roles, although this will be probably not 2009; Rivera, 2011; World Bank, 2012) also FC could take this role possible for small scale FCs. (following Jia and Huang, 2011; Poulton et al., 2010). This can be Another point related to the positioning is that the local level especially relevant in a country like China where the extension ser- orientation of the FCs, gives them the benefit of being in close vice is still dominated by a linear transfer of technology approach contact with farmers’ needs, demands and initiatives. However, de- and does not yet possess the competences to act as service system spite them receiving media attention and nation-wide coverage, coordinator (cf. Ito et al., 2012), and would need to undergo a this may provide insufficient clout for developing durable relation- transition towards roles attributed to the ‘new extensionist’ which ships with service providers and buyers, and be not conducive to requires building additional capacities for facilitation and coordina- establish economies of scale which can enhance the durability of tion (following Christoplos, 2010; Sulaiman and Davis, 2011). commercial relationships. This resonates with findings by Poulton As regards the positioning of the FC as innovation intermediary, et al. (2010) on that complexity of collective decision-making it cannot always act as a neutral actor because it clearly represents structures make them less well placed to respond quickly to the farmers’ interest (cf. Devaux et al., 2010; Hellin, 2012; Kristjan- changes in buyers’ requirements, and on another level to the Please cite this article in press as: Yang, H., et al. Functions and limitations of farmer cooperatives as innovation intermediaries: Findings from China. Agr. Syst. (2014), http://dx.doi.org/10.1016/j.agsy.2014.02.005 10 H. Yang et al. / Agricultural Systems xxx (2014) xxx–xxx observation by Ton and Jansen (2007) that local level FCs are more improving the management of international agricultural research. Agric. Syst. 78, 213–241. knowledgeable on demand articulation while FC federations are Han, J., 2007. Survey on Farmers’ Cooperatives in China. 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