Income Effects and Mechanisms of Farmers’ Participation in Agricultural Industry Organizations: A Case Study of the Kiwi Fruit Industry

Eliminating all forms of poverty is a core component of the United Nations’ Sustainable Development Goals. At the household level, poverty and income inequality significantly threaten farmers’ sustainable development and food security. Based on a sample of 1234 kiwi farmers from the Shaanxi and Sichuan provinces in China, this paper empirically examines the impact of participation in agricultural industry organizations (AIOs) on household income and income inequality, as well as the underlying mechanisms. The results indicate the following: (1) Participation in AIOs increased farmers’ average household income by approximately 19,570 yuan while simultaneously reducing the income inequality index by an average of 4.1%. (2) Participation increases household income and mitigates income inequality through three mechanisms: promoting agricultural production, enhancing sales premiums, and improving human capital. (3) After addressing endogeneity concerns, farmers participating in leading agribusiness enterprises experienced an additional average income increase of 21,700 yuan compared to those participating in agricultural cooperatives. Therefore, it is recommended to optimize the farmer–enterprise linkage mechanisms within agricultural industry organizations, enhance technical training programs, and strengthen production–marketing integration and market connection systems, aiming to achieve both increased farmer income and improved income distribution.