Determinants of Members Utilization of Agricultural Inputs from Cooperatives: The Case of Dire Dawa Administration, Ethiopia

Abstract

The rural poor in developing countries are often at a competitive disadvantage in the wider economy because of persistent market, state and institutional failures. Smallholders may face difficulties in selling their small agricultural surpluses because of the prohibitively high transactions costs incurred in assembling, transporting and marketing these surpluses. Smallholders may be unable to access necessary public sector services needed to sustain and improve their livelihoods services such as input supply, output marketing, credit provision, or conflict mediation because the state’s infrastructure is insufficiently responsive to their needs. Despite the focus on agricultural cooperatives, cooperatives in Ethiopia have been characterized with a number of limitations and challenges. Knowledge about their performance thus is of major importance for better understanding especially on perception of the members towards the cooperatives and other factors affecting member’s participation in the day to day activity of the cooperative. In Dire Dawa the status of agricultural cooperatives are not clear. On the other hand there is no studies’ focus on cooperative. Research based finding that focus on determinants members input utilization from cooperative and other service of the cooperative  and perception of members towards the cooperatives are very  crucial and significantly  help policy makers and experts on the area to  have the right understanding and undertake intervention that significantly enhance the performance of the cooperative Hence, the present study focuses on identifying determinants of members input utilization from cooperative , in addition to identifying member’s perception towards the agricultural cooperatives. A total of 140 respondents were able to respond to self administered questionnaire. The respondents were selected using stratified sampling technique, Pre-tested self-administered questionnaire was administered to the respondents to collect necessary data for the study, and moreover, focus group discussion and detail personal interview were conducted for the qualitative data. Likert scales, binry logit and descriptive statistics were used for the analysis of the data gathered. The model results revealed that among 12 explanatory variables included in the model, 5 were found to be significant at less than 10% probability level. More specifically, these variables include Level of education , off/non-farm income, perception to input price,  farm size, access to credit, distance of the cooperative from the farmer house,  and patronage refund. The statistical analysis on the perception of members towards cooperative showed that there is significant difference in the perception of user and non user towards agricultural cooperative. Therefore, facilitating credit access to communities in the study area, promotion of off-farm activities, appropriation of surplus in the form of patronage refund, Above all promoting activities that improve perception and knowledge of members towards agricultural cooperative, are recommended.

Keywords: Agricultural input, Cooperatives, Dire Dawa, likert, logit and probit models