Smallholder farmers’ participation in agricultural cooperatives is often promoted as a promising strategy for overcoming market imperfections and to increase farmers’ productivity and income. In recognition of this potential, in recent years, Ethiopia has shown renewed interest in promoting cooperatives. However, there is lack of empirical evidence of the impact that cooperatives have on farmers’ performance in Ethiopia. Using a matching technique, we evaluate the impact of coffee cooperatives on the performance of their member households in terms of income and coffee production. We use data from coffee farmers in south-west Ethiopia. The overall results suggest that members of cooperatives are not faring much better than non-members. The treatment effects we measured were not statistically significant from zero. Yet, the aggregate figures mask differences between cooperatives and amongst individual cooperative members. Average treatment effects on members differ between cooperatives, in general older members, those who have benefitted from more education and those with larger coffee plantations seem to benefit more from membership. Our analysis sheds light on the heterogeneity in the impact that membership of a cooperative can have: this differs by cooperative and by members within cooperatives, a finding that has important policy implications.
Background: Most coffee in Ethiopia is produced by smallholder farmers who face a daily struggle to get sufficient income but also to feed their families. At the same time, many smallholder coffee producers are members of cooperatives. Yet, literature has paid little attention to the effect of cooperatives on combating food insecurity among cash crop producers including coffee farmers. Objective: The objective of the study was to investigate how coffee cooperative membership may affect food security among coffee farm households in Southwest Ethiopia. Methods: The study used cross-sectional household data on income, expenditure on food, staple food production (maize and teff), and utilization of improved inputs (fertilizer and improved seed) collected from 256 randomly selected farm households (132 cooperative members and 124 nonmembers) and applied an inverse probability weighting (IPW) estimation to assess the impact of cooperative membership on food security. Results: The result revealed that cooperative membership has a positive and significant effect on staple food production (maize and teff) and facilitated technological transformation via increased utilization of fertilizer and improved seeds. Nonetheless, the effect on food expenditure and income could not be confirmed. Conclusion: Findings suggest trade-off between coffee marketing and input supply functions of the cooperatives impairing their true food security impact from the pooled income and production effect.
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