Impact of Agricultural Cooperatives on Income of Households: The Case of Ejere District, Oromia National Regional State, Ethiopia

Abstract

Agricultural cooperative is widely considered as a vital foundation that can help smallholder farmers to overcome the constraints that hinder them from taking advantages of their business. The major concern of this study is, to evaluate the impact of agricultural cooperative on total annual income of participant households in Ejere district of West Shewa Zone, Ethiopia. To meet the objectives of study a total of 430 sample households were randomly interviewed. Descriptive statistics, logistic regression and propensity score matching were used to analyze data. The logistic regression output showed that access to extension services, marital status, clarity of cooperative objectives, perception and access to credit service were positively and significantly influenced the participation of household head in agricultural cooperative at (P<0.01) whereas access to market information and total livestock unit positively and significantly influenced the participation of household head in agricultural cooperatives at (P<0.05). Propensity score matching estimation result significant difference between agricultural cooperative participant and non-participant in terms of total annual income. That is, the total annual income of agricultural cooperative participants is 14,990.076Birr higher than that of non-participants. Thus, policy makers should focus on providing extension services, raising market information as well as increasing access to credit services of cooperatives in the study area.

Keywords: Annual income, Cooperatives, Impact, logistic, outcome

JEL: M2 L3 R2

DOI: 10.7176/EJBM/13-9-03

Publication date:May 31^st 2021