EFFECTS OF PEER PRESSURE IN AGRO-CLUSTERS OF WEST JAVA

Abstract

Agglomerations of agricultural activity yield a number of institutional and infrastructural benefits for farmers. However, these regional concentrations also increase competition among farmers. We quantify to what extent competitive pressure affects farmers’ behaviour in agro-clusters, by analysing a survey of 1,250 farmers in West Java. We use a conceptual model based on the theory of planned behaviour and a behavioural interaction model. We also propose and econometrically test several hypotheses. We find that specific competitive environments for certain aspects of agricultural production matter most. In high-density agglomerations, less peer pressure appears to foster more cooperative behaviour. Food insecurity increases self-interest, and more intense cooperation is associated with lower income and appears to be regionally heterogeneous. Policies intended to facilitate cooperation could therefore be tailored to specific aspects of agricultural production and specific regions of interest.