Effects of peer pressure in agro-clusters of West Java

Agglomerations of agricultural activity yield a number of institutional and infrastructural benefits for farmers. However, these regional concentrations also increase competition between farmers. We quantify to what extent competitive pressure affects farmers’ behaviour in agro-clusters analysing a survey of 1,250 farmers in West Java. This assessment is derived from a conceptual model based on the theory of planned behaviour and the behavioural interaction model. We also derive several hypotheses which are econometrically tested. We find that the specific competitive environments farmers are exposed to for specific aspects of agricultural production matter most. In high density agglomeration environments, lower degrees of peer pressure foster cooperative behaviour. Food insecurity is found to enlarge self-interest, more intense cooperation is associated with lower income levels and appears to be regionally heterogeneous. Policies intended to facilitate cooperation could therefore be tailored to specific aspects of agricultural production and the specific region of interest.