Factors Influencing Farmers’ Membership Preferences in Agricultural Cooperatives in Ethiopia

Abstract

A study entitled factors determining farmers’ decision to cooperative membership status in Ethiopia was conducted with the aim of identifying factors influencing decision to membership in primary agricultural cooperatives in the study area. A multi stage stratified random sampling technique was used to select representative districts, kebeles, and farmers; and a total of 335 smallholder farmers (229 cooperative members and 106 non-membered farmers) were surveyed to collect primary data from two sample regions (Oromia and Southern Nations, Nationalities, and Peoples' Region) compromising of six sample districts from three respective zones. The research method mainly used to collect data was semi-structured interview schedule. Both descriptive analysis and econometric method of data analysis (using binary probit model) were used. The result of descriptive analysis showed that minimum annual dividend, low number of members compared to the expected, shortage of training access, low market access, farmers’ preference of town center traders than cooperatives, and less interest of farmers to be a member of the primary cooperatives were the major challenges faced by famers and/or primary cooperatives in the study area. The result of econometric analysis revealed that eight among the 19 explanatory variables namely age of the household head, need to access credit, need to access agricultural inputs, perception of farmers towards the adequacy/attractiveness of dividend distributed, awareness about the socio-economic importance of primary cooperatives, trust towards cooperative management committees, households’ need to access cooperative as a market outlet, and the need to access training from primary cooperatives were found to significantly determine smallholder farmers’ decision to joining agricultural cooperatives in Ethiopia. From the finding, it is, therefore, recommended to stress on improving farming experience and exposures of farmers, increasing cooperatives’ market demand for agricultural commodities/products, distribution of adequate dividend, provision of adequate credit services and agricultural technologies/inputs, organizing frequent capacity building trainings for farmers, and improving awareness of farmers about the socio-economic importance of cooperatives for encouraging and pooling smallholder farmers to join primary cooperatives in Ethiopia.