Mekelle Un iversity FDANR The school of Graduate Studies Faculty of Dryland Agriculture and Natural Resources Submitted in Partial Fulfillment of the Requirements for the Master of Members’ ParticSicpieantcioe nD eingr eteh ein A Cwooapbeerla Mtivuel tMi-aPrkuertpinogs e Farmers Cooperatives Union and its Affiliates, Amhara Region, Ethiopia By Kirub Alemayehu Yihune May 2007 A Thesis Submitted in Partial Fulfillment of the Requirements for the Master of Science Degree in Cooperative Marketing Major Adviser: Dr.G.Veerakumaran (Asso. Prof.) June 2008 Mekelle i FDANR U Mekelle University The school of Graduate Studies Faculty of Dryland Agriculture and Natural Resources Members’ Participation in the Awabel Multi-Purpose Farmers Cooperatives Union and its Affiliates, Amhara Region, Ethiopia By Kirub Alemayehu Yihune A Thesis Submitted in Partial Fulfillment of the Requirements for the Master of Science Degree in Cooperative Marketing Major Adviser: Dr.G.Veerakumaran (Asso. Prof.) June 2008 Mekelle ii Declaration This is to certify that this thesis entitled “Members’ Participation in the Awabel Multi- Purpose Farmers Cooperatives Union and its Affiliates, Amhara Region, Ethiopia”, submitted in partial fulfillment of the requirements for the degree of M.Sc., in Cooperative Marketing to the School of Graduate Studies, Mekelle University, through the Department of Cooperatives, done by Mr. Kirub Alemayehu Yihune, Id. No. FDA/PR 0019/99 is an authentic work carried out by him under my guidance. The matter embodied in this project work has not been submitted earlier for award of any degree or diploma to the best of my knowledge and belief. Name of the student Kirub Alemayehu Yihune signature and date_______________ Name of the supervisor _____________________ signature and date_______________ i Abstract This research tried to identify various characteristics of members that influence their participation level in cooperative governance and business. Participation measures included attendance at meetings, utilization of cooperative services and building cooperative capital through shareholding. Member socio-economics, organizational environments and beliefs concerned cooperative principles, collective action, individual member identities as associated with cooperative membership, satisfaction with cooperative operation and management are used to analyze the differences among groups of members. The study was conducted in East Gojam Administrative Zone, Awabel Multi-Purpose Farmers’ Cooperatives Union area of operation. Ninety-five individual members and 35 potential members surveyed in November to January 2007/08. The major concern of this study is to assess and identify determinants of members to participate actively in cooperatives with the aim of proposing measures for development of self- reliant cooperatives that address member’s participation factors. It is also assessed the problems of potential members to join to the existing multi-purpose cooperatives. Descriptive statistics such as mean, standard deviation and percentages were used to describe sample respondents in terms of some desirable variables. A binary logit model was employed to analyze determinants of members’ active participation in cooperatives. Fifteen explanatory variables were included in the model of which Socio- economic four factors and institutional environment two a total of six were found significant at less than 10% probability levels. This study also attempted to examine the differences between members and potential members the result showed that the two groups varied in socio economic factors. ii . Acknowledgement I like to express my heart-felt thanks and sincere appreciation to my Major Research Advisor Dr.G.Veerakumaran (Asso. Prof.) head of Cooperatives department for his all-round help, guidance, valuable comments and encouragement that enabled me to complete the research work. I sincerely thank the Federal Cooperative Agency, for their support to cover part of the cost for this study and data collection. I also owe my deepest gratitude to Self-Help Ethiopia, Head Office, in covering and supporting part of this research work fund. I have profound appreciation for Ato Bidru Dedegba, Depute head of Federal cooperative Agency for encouragement and support to accomplish this task within the scheduled period. I am indebted and have great appreciation for my friend Geremew Amare for providing computer facility and for his valuable support and encouragement of my family up to the completion of the whole work. I would like to express my sincere appreciation and gratitude to my family for their encouragement, inspiration and help with out which I could not have completed the study on time. I would like to extend special thanks for support and encouragement to the following persons Zebenaye Minilik, Belete Alem and Abreham Ijeta who provided valuable contributions to the completion of this document. Last, but not least, my deepest appreciation to all participant farmers, sample primary cooperative’s bookkeepers and government workers of East Gojam Administrative Zone. Finally, I would like to acknowledge all individuals and organizations that directly or indirectly contributed to the successful completion of this study. iii ACRONYMS AND ABBREVIATIONS COOP Cooperative CSA Central Statistics Authority ETB Ethiopian Birr FAO Food and Agricultural Organization FCA Federal Cooperative Agency GA General Assembly HHs House Holds ICA International Cooperative Alliance ILO International Labor Organization MPFCU Multi- Purpose Farmers Cooperatives Union NGO Non-Governmental Organization PAs Peasant Associations PEI Participatory Efficiency Index Qt Quintal (100-kilo gram) SPSS Statistical Program for Social Sciences VIF Variance Inflation Factor iv LISTS OF TABLES Lists of Tables Page Table 01: Types of participation ……………………………………………….… 15 Table 02: Sampling frame details …………………………………………….…… 27 Table 03: Definitions of explanatory variables to explain Participation in Cooperatives ……………………………………………………….….……39 Table 04: Age of Members by participation level ………………………….….……47 Table 05: Educational Attainment of members ……………………………….…....48 Table 06: Land holding and cultivation by respondents …………………….…….49 Table 07: Land holding and cultivation by level of participation …………..….…49 Table 08: Oxen owned by respondents …………………………………………....…50 Table 09: Amount of grain offered to the market by respondents …………….......50 Table10: Volume of farm input credit utilization by respondents (birr) ……..…...51 Table 11: Volume of farm input (fertilizer) utilization by respondents …….. ..…..52 Table 12: Cooperative training involvement of sample members ……………..…. 53 Table 13: Duration of Cooperative Membership by respondents ……………........53 Table 14: Members’ satisfaction on their organization and management of the Cooperative ……………………………………………………….......54 Table 15: T-test for mean difference of continuous variables …………………......55 Table 16: Chi-square test for frequency difference …………………………...…....56 Table 17: Extent of Participation in GA meeting …………………………………..58 Table 18: Members Economic Participation ………………………………………. 61 Table 19; Participation of affiliated Sample Cooperatives in the union …………..62 Table20: Parameter Estimates for binary logit ………………………………….….65 Table 21: T-test for mean difference of continuous variables ……………….…......69 v Table 22: Chi-square test for frequency difference between Members and Potential Members …………………………………………….……70 Table 23: Market service accessibility ……………………………………………...71 Table 24: Age of respondent’s …………………………………………………..….72 Table 25: Educational Attainment of respondents ………………………….…..…72 Table 26: Cultivable land size by respondents ………………………………...…..73 Table 27: Oxen holding by respondents ………………………………………..…..74 Table 28: Categories of crops cultivated by respondents ……………………...….74 Table 29; Farm input credit utilization by respondents ………………………......75 Table 30: Amount of farm input utilization (Fertilizer) by respondents ….….….76 Table31: Grain Sells volume by respondents ………………………………………77 Table 32: Annual Gross income ………………………………………………..…...78 Table 33: Accessibilities of Services to Potential members..………………….…...80 Table 34: Members’ beliefs in cooperative principles ...…………………….....….81 Table 35: Members’ beliefs in collective action ……………………………….…...82 Table 36: Members’ identification with cooperatives …………………………….83 Table 37: Members’ satisfaction with their cooperative services ……………......84 Table 38: Members’ beliefs on equity issues …………………………………....…87 Table 39: Members’ influence …………………………………………………...…88 vi LISTS OF TABLES IN APPENDIX Lists of Tables Page 7.1 Contingency Coefficient of discrete variables in binary logit …….….……...….97 7.2. The Variance Inflation Factor for continuous explanatory variables ……..........97 7.3. Interview Schedule ………………………………………………..…………….98 7.4. Focus Group Discussion checklists …................................................................109 vii Biography The author was born in 1968 from his mother Etenesh Tekelle and his father Alemayehu Yihune at Debre Markos town. He studied his Primary and Junior Secondary at Debre Markos town Tekelle Haimanot School. Then he joined and completed his high school at Debre Markos Comprehensive. In September 1989, he joined Alemaya University of Agriculture and graduated with B.Sc. degree in agricultural economics in June 1992. There after he was employed in East Gojam Administrative Zone, Agricultural Development Department and served as expert and team leader for nine years. April 2002 to March 2003 had been serving as project preparation expert in National Disaster Prevention and Preparedness Fund Administration. Since, April 2003, until he joined to the School of Graduate Studies at Mekelle University in October 2006 he had served as Agricultural Cooperatives promotion team leader in Federal Cooperative Agency. viii