Comparison of the Livelihood of primaryAgricultural Cooperatives member and non-member Households: TheCase of Dugeda Woreda, Oromyia Regional State, Ethiopia

Abstract

This study is designed to identify the impacts of membership in primary agricultural cooperatives in terms of income, level of agricultural input expenditure and livestock holdings of member households in DugedaWoreda were the specific objectives of the study. A random sample of 98 cooperative member’sprimary agricultural cooperatives and 131 non-membersliving in three kebeles of the district were selected. Data were generated using a structured questionnaire, key informants interview and focus group discussions. Primary data were complemented through secondary sources. Descriptive statistics and the Propensity Score Matching (PSM) technique were used for analyzing the data. Estimation of average treatment effect on the treated (ATT) using the PSM technique showed that farm households who are members of primary agricultural cooperatives, on average, generated ETB 13029 per annum compared to the counterfactuals who are non-members but comparable to the members based on observable covariates. But it showsmembership in agricultural cooperative brought no significant impact on the agricultural input expenses and livestock holding of its members, compared to the non-members given that there is no bias due to unobservable covariates. This could be attributed to the fact that since one of the objectives of cooperatives is lowering down input costs through scale effects (low unit transaction cost) and better negotiation power, the insignificant result of agricultural input expenses is not thus surprising. Also insignificant impact of membership on household's livestock holding could be attributed to preference and technology.The finding shows that cooperatives improved the livelihoods of service user farmers through impacting better income, and reduced input costs. In view of such evidence, further promotion, Development of agricultural cooperatives development policy, Establishment of agricultural cooperative fund, deepening and supporting of agricultural cooperatives is recommended.