THE ROLE OF COOPERATIVES IN RURAL DEVELOPMENT: THE CASE OF AJJE, SHALLA DISTRICT IN OROMIA REGIONAL STATE

Abstract

The study examines and discusses the role Primary Agricultural Cooperatives play in promoting rural development and enhancing the welfare status of the rural poor through socio-economic development. The Evolution and concepts of cooperatives movements in Ethiopia are also presented. Data Collection was achieved through questionnaires, interviews, observations, and the study of published materials in the field from various sources. Various data in the study demonstrates that the selected case study cooperatives significantly contributed to rural development through agricultural cost reduction, access to market and better price for outputs to their members. On the other hand, the study also shows that cooperatives’ potential and their growth was not as anticipated due to weak performance, limited package of services, poor management, financial limitations etc. The Thesis concludes that agricultural cooperatives in Ajje, Shalla District have shown a great potential in promoting rural development. If properly supported and the capacity of the leadership is enhanced, the cooperatives could respond favorably to the required attributes for rural development process. Recommendations to improve the current status includes, revisiting the objective of forming agricultural cooperatives, ensure that only institutions with viable economic plans which are member centered and with community driven ideas shall be promoted and encouraged; and that the agricultural cooperatives shall be treated as grass-root level organizations, with tremendous potential to link the rural communities to other institutions. In order to stimulus rural development, the rural communities shall be linked through the cooperatives to wide ranging service providers and institutions with a view of brining various services to the members. Furthermore, at the center of their entire functions and business dealings, the cooperatives shall operate in such a way that won’t undermine and compromise members’ sense of belongings and ownership.