The impact of agricultural cooperatives membership on the wellbeing of smallholder farmers: empirical evidence from eastern Ethiopia

Abstract

This study evaluated the impact of agricultural cooperative membership on the wellbeing of smallholder farmers using cross-sectional data collected from the eastern part of Ethiopia. Using consumption per adult equivalent as a wellbeing indicator, we measured the impact of agricultural cooperative membership by implementing propensity score matching and endogenous switching regression estimation techniques. Both estimation methods indicate that joining agricultural cooperatives has a positive impact on the wellbeing of smallholder farmers. Furthermore, the analysis also indicates that agricultural cooperative membership has a heterogeneous impact on wellbeing among its members.

A Review of the Empirical Literature on Farmer Cooperatives: Performance, Ownership and Governance, Finance, and Member Attitude

“…The study indicated a treatment effect of 17.6–26.5 per cent on consumption expenditure. However, like Verhofstadt and Maertens () and Shumeta and D'Haese (), Ahmed and Mesfin () also observed the treatment effect increased as farm size increased. To add further ambiguity, Mojo et al () observed a positive impact of membership in Ethiopian coffee cooperatives on farm income with switching regression but not with propensity score matching.…”

“…(), Ma and Abdulai () observed a stronger effect of cooperative membership for relatively small members (5.73%) than relatively large members (3.81%). Finally, also using switching regression, Ahmed and Mesfin () studied a sample of 250 farm producers in Ethiopia and took consumption expenditure per adult as the outcome variable. The study indicated a treatment effect of 17.6–26.5 per cent on consumption expenditure.…”

The economic impacts of agricultural cooperatives on smallholder farmers in rural China

“…These variables include age, education, dependency ratio, farm size, sprayer ownership, computer ownership, income specialization, marketing contract, labor availability, risk attitude, social networks, and location variables. The choice of these explanatory variables is primarily based on previous studies on cooperative membership (e.g., Ahmed & Mesfin, ; Bernard & Spielman, ; Chagwiza et al., ; Fischer & Qaim, ; Ito et al., ; Mojo et al., ; Wossen et al., ; Zheng et al., ).…”

“…Government programs have thus emerged to enhance smallholder farmers’ performance in modern agricultural production. Among others, agricultural cooperatives have been promoted based on their strong potential to improve smallholders’ farm performance (Ahmed & Mesfin, ; Chagwiza, Muradian, & Ruben, ; Francesconi & Wouterse, ; Hellin, Lundy, & Meijer, ; Liang, Hendrikse, Huang, & Xu, ; Mojo, Fischer, & Degefa, ). Generally, the development of cooperative organization in developing countries is expected to facilitate smallholder farmers’ market participation, increase farm incomes, enhance crop productivity, and lower production costs (Abebaw & Haile, ; Hellin et al., ; Huang & Ding, ; Mojo et al., ; Zheng, Wang, & Awokuse, ).…”

The Role of Multi-Purpose Cooperatives in the Economic Development in Ethiopia, The Case of Lalo-Assabi District (West Wollega Zone, Oromia Regional State)

“…Study conducted by some researchers show that there is positive relationship between household heads, educated members, more land and few family size. According to Ahmed & Mesfin (2017), cooperative membership was found to be more beneficial for household heads with higher education, more land and fewer children.…”