Exploring variability across cooperatives: economic performance of agricultural cooperatives in northern Ethiopia

Abstract

The number of agricultural cooperatives increased quickly in Ethiopia since the 1990s. While many papers studied the impact of membership of Ethiopian cooperatives, not much is known on their performance. This study takes a cooperative-level perspective which is unique in an African context. It compares the economic performance proxied by sales revenue and profit of a wide range of agricultural cooperatives in northern Ethiopia. Data were collected from 511 agricultural cooperatives in 12 districts of Tigray. The contributing factors of the performance are analyzed with Ordinary Least Squares regression (OLS) and Heckman selection models. Our results underscore the importance of membership size, total assets, presence of conflict among members, and union membership. Chairperson characteristics and the internal organization of a cooperative seem to be less correlated to performance.

Analysis of the Effect of Cooperatives on Increasing Farmers’ Income from the Perspective of Industry Prosperity Based on the PSM Empirical Study in Shennongjia Region

“…It also involves improving the technical efficiency of farmers [15]. With the goal of improving production, marketing and livelihoods, cooperatives are a way to reduce high transaction costs as well as serving multiple purposes, such as increasing member income and improving productivity and product quality [16,17]. Cooperatives effectively improve the technical efficiency of members by providing support to farmers, and then promote the productivity and commercialization of small farmers [18].…”

Effects of cooperative membership on financial performance of banana farmers in China: A heterogeneous analysis

“…To overcome the constraints of smallholder agriculture, agricultural cooperatives, as an important institutional arrangement, have been formed and developed to support sustainable agricultural production and rural development in the countries where smallholder farmers usually dominate agriculture. A great number of studies focusing on Asian countries (e.g., China and India) and African countries (e.g., Ethiopia, Rwanda, and Zambia) have confirmed the important role of agricultural cooperatives in helping smallholder farmers benefit from agricultural production and marketing (Chagwiza et al, 2016;Iliopoulos, 2013;Kumar et al, 2018;Liu et al, 2019;Ma & Abdulai, 2019;Manda et al, 2020;Priscilla & Chauhan, 2019;Sebhatu et al, 2021).…”

Heterogeneous welfare effects of farmer groups in smallholder irrigation schemes in South Africa

“…However, a few studies (e.g. Barham & Chitemi 2009;Sebhatu et al 2021) have discussed group characteristics and internal dynamics, and how these affect the influences of groups. Often, the focus of studies is on whether a farmer belongs to a group, without investigating the characteristics of the different groups that farmers belong to.…”

“…Barham and Chitemi (2009) found that groups that were characterised by maturity, strong internal institutions, good asset bases of natural capital and male dominance had better market outcomes. Sebhatu et al (2021) highlighted the importance of group total assets, membership size and occurrence of conflict among members as vital factors that influence group performance. It is difficult to monitor and enforce rules in bigger groups because of the increasing transactional cost for rule enforcement due to free-riding among members (Gezahegn et al 2019).…”