Factors Affecting Growth of Multipurpose Cooperative Associations Engaged in Coffee Plumping: in Jimma Zone, South west Ethiopia.

Abstract

Multipurpose cooperatives engaged in coffee plumping (MPCEICP) are cooperatives that provide services like: coffee (cherry) collecting, processing and selling in the international markets and then paying dividends to the members. Their growth is not uniform and not as expected: some grew very fast, some became stagnant, some are bankrupt and even few were dissolved. The general objective of this study was to identify factors affecting the growth of multipurpose cooperative associations engaged in coffee plumping in Jimma zone; where eleven (11) woredas are known to produce coffee and have cooperative associations. An exploratory research design was used and three woredas with high burden of cooperatives were selected conveniently. Data were collected by; random sampling method from 247 respondents of 11 MPCEICP using questionnaire, from 10 key informant interview and document review. Descriptive statistics like percentage, mean and standard deviation and statistical tools such as; Chi- square test, correlation and regression analysis and Mann Whitney U test were used for data analysis. The findings of the study showed that: marketing factors, financial factors, accounting trend factors, management factors, cherry collection factors and members’ participation factors have the biggest potential to affect/contribute to the growth of cooperative associations engaged in coffee plumping followed by politico-legal factors. Furthermore analysis showed that, lack of appropriate machinery and equipment, lack of getting sales document, illegal payment due to pressure from government bodies, level of awareness of the members on their collective agreement, amount of credit purchase of cherry made from the members, the existence of manager in the cooperative, level of knowledge on financial forecast, amount of shares of common stock sold to the members, amount of money paid as an interest to banks and the cooperative union, were determinant items. Therefore, the identified 9 determinant items are the factors that are most affecting growth of the cooperatives. It is recommended that cooperative agency should solve the marketing problems and politico-legal factors; the cooperative union should work on the problems linked with appropriate machineries, equipments and sales documents; the multipurpose cooperative associations should try to curb problems linked with financial factors, accounting trend factors, management factors, cherry collection factors and members’ participation factors. Detailed study on the identified factors, factors not included in this study and similar studies in other parts of the country could be future area of investigation