Impact of Cooperatives on Poverty Reduction: The Case of Licha Hadiya Farmers’ Cooperative Union in Lemo Woreda; Hadiya Zone, SNNPR, Ethiopia

Abstract

The main objective of this study was to evaluate impact of Licha Hadiya farmers’ multipurpose agricultural cooperative union on poverty reduction in rural household the cause of Lemo district. Primary data was collected through structured questionnaire based on 75 members’ respondents and 95 non-members respondents from purposively selected 4 kebeles in Lemo woreda. Total 170 household was selected by using multistage sampling method. Secondary data were gathered different published and unpublished relevant material. Hadiya zone cooperative and marketing sectors, Lemo woreda cooperative and marketing sectors are also secondary data source. In study logit model and propensity score matching (PSM) method were employed to achieve the objective of the study that to assess poverty reduction indicators outcome those income, asset, expenditure and human capital between cooperative members and nonmembers. Based on PSM estimation results of study were Licha Hadiya farmers’ cooperative union have significant impact on rural household poverty reduction in most above listed impact indicator outcome variable was significantly different among members and nonmembers of cooperative. The result indicate that as agricultural cooperative have positive and statistically significant impact on participant household those on income from crop sells, durable home assets, saving and house hold food expenditure. In view of such evidences, further promotion, deepening, strengthen and supporting of agricultural cooperative and its service recommended for rural poverty reduction.