IMPACT OF MULTI-PURPOSE COOPERATIVES MEMBERSHIP ON SMALLHOLDER FARMERS’ MAJOR CROPS COMMERCIALIZATION LEVEL AND INCOME IN DALE SADI AND SADI CHANKA DISTRICTS OF KELLEM WOLLEGA ZONE, OROMIA REGION, ETHIOPIA.

Abstract

The transition of smallholders' farmers from subsistence to market-oriented agriculture is meant to increase smallholder farmers’ income and overall rural economic progress. The transition needs the assistance of rural development institutions such as multi-purpose cooperatives (MPCs). The study was carried out to supplement the existing insufficient empirical data in major crop-based studies on the factors that influence major crop commercialization level and the impact of multipurpose cooperatives on smallholders' level of crop commercialization and crop income. The assessment of smallholders’ crop commercialization level and the determinants of smallholders’ major crop commercialization level were the specific objectives of the study. Unlike previous studies on determinants of agricultural commercialization, this one focused on major crops grown by smallholder farmers in the area. A multistage sampling technique was employed. Purposive sampling procedures were utilized to choose the two districts, whereas random sampling techniques were used to choose the research kebele and sample household heads. Total of 212 household heads, of which 104 members and 108 non-member sample household heads were selected as the study sample by using Cochran's sample size calculation formula. Both primary and secondary data both quantitative and qualitative in nature were used for the study. Descriptive statistics, the household commercialization index (HCI), Tobit, and the Endogenous switching regression model were used for data analysis. Accordingly, the average crop commercialization index was 44.04% for sample household heads, and it was also computed for twelve crops. The Tobit model depicts that family size, total crop output harvest, credit use, access to market information, and improved input use positively affect the level of crop commercialization, whereas livestock holding and disease and pest occurrence negatively affect the degree of crop commercialization. The impact evaluation result indicates the significance difference between member and non member households in terms of both outcome variables, the mean commercialization index for member household was 47.32 and 40.89 for non members. The mean crop income for member household was 39773.8 while it is 28453.7 for non members. The provision of loans, production inputs, and market knowledge should be addressed in order to increase smallholder crop commercialization level.