Factor Affecting Membership Increment and Benefit Sharing of Members in Primary Coffee Cooperatives in Debub Bench District, Bench Maji Zone, Ethiopia

Abstract

The objective of the study was to identify factors affecting membership and estimating the benefit sharing of farmers in primary coffee cooperatives with the specific objectives of assessing if farmers get relatively more profit share while selling coffee through cooperative market channel than other private trading channel; analyzing farmer’s membership and identifying the underlying determinants of decision to join primary coffee cooperatives and identifying opportunities and challenges for primary coffee cooperatives growth in the study area. Both primary and secondary data were used for the study. The primary data for this study were collected using semi-structured questionnaire from 216 households (154 members of primary coffee cooperative and 62 nonmembers). In addition to that two coffee cooperative unions, 10 suppliers, and five exporters were selected following the chain of actors. Both descriptive and econometric methods of data analysis were employed. Binary Logistic regression model was used to identify factors that affect coffee farmers’ cooperative membership. The result of econometric analysis using Logistic regression model revealed that five among the 11 explanatory variables namely, educational level, land allocated for coffee production, awareness of farmers towards the socio economic importance of cooperatives, experience in coffee growing and the adequacy of dividend were found to significantly determine smallholder farmers’ decision to joining primary coffee cooperatives in the district. The result of marketing margin analysis indicated that the two actors, unions and private exporters received highest share of market margin 65.82% and 56.21% and profit margin of 65.95% and 60.14% respectively compared to others actor in the coffee marketing chain. However, farmers received higher profit share (13.85%) when they sold their coffee through cooperative marketing channels and 7.30% if they used cannel II ( private trader channel ) From the finding, it is, therefore, recommended that regional government in corroboration with other concerned bodies should work on improving educational status, allocation of land, farming experience, awareness of farmers about the socio-economic importance of cooperatives and distribution of dividend in order to encourage and attract smallholder farmers to join primary coffee cooperatives in the district.