WELFARE IMPLICATION OF COFFEE COOPERATIVES ON SMALLHOLDER FARMERS IN ETHIOPIA: THE CASE OF SIDAMA ZONE IN SOUTHERN NATIONS, NATIONALITIES AND PEOPLES REGIONAL STATE

Abstract

The development of agriculture sector in the country is constrained by lack of sufficient knowledge, different support and access of market and its facilities. Cooperatives provide alternative resources to support the poor. The overall objective of this study is to analyze welfare implication of coffee cooperative on small holder farmers’ production, income and coffee sold in Sidama zone. Cross-sectional survey data was conducted with 121 small holders (68 treatments and 53 controls) farmers using two stage simple random sampling techniques. The researcher used both Primary and secondary data. Descriptive statistics and econometric model were applied for analyzing quantitative data. Propensity score matching were employed to analyze the impact of coffee cooperatives on production, income and market of member small holders. The average coffee production, total income and coffee sold of cooperative members are greater by 187 kilogram, Birr 204 and 181 kilogram respectively than non-member coffee cooperatives. Except income the effect is also significant at 95% level of significance. When we apply the average treatment effect on the treated estimator the average coffee production, income and coffee sold of members cooperative are 352 kilogram, Birr 3274 and 335 kilogram respectively.