Determinants of Participation in Dairy Marketing Cooperative and Its Contribution to Household Income in Welmera District of Oromia Special Zone, Oromia Region, Ethiopia

Abstract

The aims of this study were to assess the contributions of dairy marketing cooperatives to income of rural households and to identify determinants of participation in those cooperatives. The study was conducted in Welmera District of Oromia Regional State in three kebeles namely Bukusame gaba robi, Gelgel kuyu and Bekekaf qore oddo. In selection of these kebeles and respondents of the study, a multistage sampling technique was applied. The required data set for the study was gathered primarily through survey method from 120 randomly selected sample households both from members and non-members of the dairy cooperatives of each sample kebele. Household survey method, key informant interview and focus group discussions were the tools used to collect the data in order to address the objectives of this study. Descriptive and inferential statistics were applied to describe the characteristics of respondents and to make inferences respectively by comparative analysis. Accordingly, among the twelve explanatory variables, elven were statistically significant. To identify the determinants of participation in dairy cooperatives, Logistic regression model was applied. The model results revealed that among the twelve explanatory variables hypothesized to determine farmers' participation in dairy cooperatives, five were found to be statistically significant. For more reliable results on the impact of dairy cooperatives on income of dairy farmers, propensity score matching( PSM) technique was applied.The results from this technique indicated that the average effect of cooperative membership on income of dairy farmers was higher, positive and significant, ranging from15382birr/yea (Nearest Neighbor) to15345birr/year (Kernel–Gaussian). In relation to quality of matching, mean comparison, standardized percentage bias before and after matching and overall measures of covariate balancing techniques were applied using PS tests and proved that there is a good balance among the covariates. Generally from the PSM results obtained ,one can undoutedly conclude that participating in dairy cooperatives has a far reaching effect on generating surplus income to dairy farmers