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Smallholders' commercialization through cooperatives: A diagnostic for Ethiopia

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  • Bernard, Tanguy
  • Gabre-Madhin, Eleni Z.
  • Taffesse, Alemayehu Seyoum

Abstract

"This paper examines the impact of cooperatives on smallholder commercialization of cereals, using detailed household data from rural Ethiopia. We review the involvement of cooperatives, in terms of who participates and where they are located. We then use the strong government role in promoting the establishment of cooperatives to assume that the decision of where to establish a cooperative is largely driven by external considerations, and is thus exogenous to the members themselves justifying the use of propensity-score matching in order to compare households that are cooperative members to similar households in comparable areas without cooperatives. Four conclusions are derived from the analysis. First, despite the spread of cooperatives – they existed in less than 15 percent of districts in 1994 and nearly 35 percent in 2005 – there are important disparities across regions. Within regions, cooperatives tend to be located in areas that already have better access to markets and lower exposure to price and environmental risks. Second, at the household level participation is only 9 percent, with poorer households less likely to participate. Third, while cooperatives obtain higher prices for their members, they are not associated with a significant increase in the overall share of cereal production sold by their members. Fourth, these average results hide considerable heterogeneity in the impact across households. In particular, we find smaller farmers tend to reduce their marketable surplus as a result of higher prices, while the opposite is true for larger farmers." from Authors' Abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 722.

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Date of creation: 2007
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Handle: RePEc:fpr:ifprid:722

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Keywords: Smallholders; small farms; Marketing; Cooperatives; Commercialization; Cereal crops;

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References

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Cited by:
  1. Mogues, Tewodaj & Petracco, Carly & Randriamamonjy, Josee, 2011. "The wealth and gender distribution of rural services in Ethiopia: A public expenditure benefit incidence analysis," IFPRI discussion papers 1057, International Food Policy Research Institute (IFPRI).
  2. Woldu, Thomas & Tadesse, Fanaye & Waller, Marie-Katherine, 2013. "Women’s participation in agricultural cooperatives in Ethiopia:," ESSP working papers 57, International Food Policy Research Institute (IFPRI).
  3. Bardhan, Dwaipayan & Sharma, M.L. & Saxena, Raka, 2012. "Market Participation Behaviour of Smallholder Dairy Farmers in Uttarakhand: A Disaggregated Analysis," Agricultural Economics Research Review, Agricultural Economics Research Association (India), Agricultural Economics Research Association (India), vol. 25(2).

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