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

Nat Mammo

doi:10.7176/ejbm/13-9-03

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

Highlights

Most of Africa’s poor hang on largely on agriculture for their livelihoods (IFAD, 2011), improving the yield, viability, and sustainability of the agricultural sector is debated to be the chief pathway out of poverty in the continent (Christiaensen & Todo, 2013; Asfaw et al, 2012; Dawson et al, 2016)
Clarity of cooperative objectives, perception, access to credit services, land holding size and marital status are most significant at significance level of P
Conclusion This paper examined the impact of agricultural cooperative on total annual income of households in Ejere district of Oromia National Regional State, Ethiopia

Summary

INTRODUCTION

Most of Africa’s poor hang on largely on agriculture for their livelihoods (IFAD, 2011), improving the yield, viability, and sustainability of the agricultural sector is debated to be the chief pathway out of poverty in the continent (Christiaensen & Todo, 2013; Asfaw et al, 2012; Dawson et al, 2016). The explanation of the above PSM estimator is the mean difference in outcomes over the common support, appropriately weighted by the propensity score distribution of participants. Stratification Matching: The idea of stratification matching is to partition the common support of the propensity score into a set of intervals (strata) and to calculate the impact within each interval by taking the mean difference in outcomes between treated and control observations. Assessing the Matching Quality: Since we do not condition on all covariates but on the propensity score, it has to be checked if the matching procedure is able to balance the distribution of the relevant variables in both the control and treatment group. This study the necessary estimation techniques along with PSM method were used It describes the average treatment effect; the common support regions; the matching algorithms and the matching quality are presented. Total annual income refers to the total income in terms of money (Birr) that a household head earns in a year from different activities including selling of goods and services

AND DISCUSSION

Findings

CONCLUSION AND RECOMMENDATION