Role of Cooperatives in Rural Development, The Case of South Nations Nationalities and People Region, Ethiopia

Abstract

For small land-holding, developing and agricultural based economic countries like Ethiopia, cooperative type of business is recommended as a solution to promote income distribution, reduce poverty and vulnerability, and improve quality of life and social welfare. Ethiopia is a second largest populace country in Africa and has nine regions and two city administrations. South Nations Nationalities and Peoples Region (SNNPR) state is third populace and most densely populated region in Ethiopia. Most of the farmers’ in this region have small plot of lands for their living, farming and rearing animals. It is obvious that such smallholder farmers are characterized by producing small amount of produce. They might bring small portion of their product to market, and the earnings might goes to cover their routine expenditure and might save the remaining for next farming. Taking this clear fact in to consideration, Since 1960s, the government of Ethiopia is promoting the significance of cooperatives as an organization that could enhance the development of small scale-farmers and other communities. Unlike other regions, SNNPR is the pioneer for starting cooperatives type of business and cooperatives are still flourishing in the region. These cooperatives are expected to serve farmers in providing agricultural inputs, marketing service for their produce, and mobilizing savings and providing credit services to their members.

The objective of this paper is to show role of cooperatives in rural development the case of South Nations Nationalities and Peoples Region.  AS of June 2011, in South Nations Nationalities and Peoples Regional state there were about 8872 primary cooperatives, 44 Cooperative Unions and One Regional Farmers Cooperative federation established.  These cooperatives have a membership of male 693,898 (77%) and female 209, 861 (23%) totally 903, 759. From the total households of the region 30.3% are member of cooperatives. Despite its age, cooperatives in Ethiopia as well as in this region didn’t flourish as expected. The sector visage challenges across the districts in the region.

Keywords: Cooperative, Agricultural Inputs, Marketing, Saving and Credit