Grain Marketing Performance through Multi-Purpose Cooperatives of Assosa Woreda, Ethiopia

Ethiopia is predominantly an agricultural country with the vast majority of its population directly involved in the production of crops and livestock. It contributes for about 46.7% of the GDP and provides employment for 85% of the population (CSA, 2006). It also accounts for highest proportion of the export revenue and contributes significant amount in supply of raw materials requirements of the country’s industries. However, for various reasons Ethiopia’s agriculture is characterized by its subsistent nature. When the issue of economic growth and development of the country is raised, one has to take into account the performance of the smallholder farmers. Reducing the challenges they are facing and utilizing their potentials can help to accelerate the agricultural sector and economic development of the country as a whole. Agricultural cooperatives are an ideal means for self-reliance, higher productivity level and promotion of agricultural development. In Ethiopia many cooperative unions are being established to strengthen the existing primary level cooperatives by pooling their scarce resources and increasing their bargaining power. However, the union’s management lacks the required knowledge and training in managing their resources. Therefore, skill development training is also required in resource management, use of funds and conditions which will enable those unions to stand by themselves as competent entities. The development of an efficient and equitable grain marketing system is a critical component for improving food security in Ethiopia, increasing both food availability and food access. Well functioning grain markets benefit both producers and consumers by reducing marketing margins and the transaction costs.This research is conducted to assess grain marketing performance through Assosa woreda primary multi-purpose cooperative societies. Assosa woreda is selected for the study due to its greatest potential among other woredas of the region. Data were collected from two sources known as primary sources and secondary sources. Primary data were gathered through interviews using structured interview schedules and check lists. Secondary data were gathered to support the information collected from primary sources. These were from reports and records of the cooperative societies, regional and woreda agriculture and rural development bureaus, regional finance and economic development bureau, the statistics authority regional office etc. Tools used for collection of primary data were structured interview schedules. In addition, group discussions were conducted with the key communicators of the woreda. JMP5 software was employed for analysis of primary data collected through interview schedules. According to the multivariate correlation test, education level and access to market information are positively correlated indicating that the higher the education level, the better would be the knowledge of the farmer to acquire news and education about the benefits of the cooperatives. This education level is also found to have a positive relationship with the farmer’s level of participation in his/her society. Multivariate Correlation test of farm size and marketed surplus has shown also a positive relationship. The positive relationship can indicate that an increase in one of the two could be an evidence for increase in the other. Size of family is found to have negative influence on marketed surplus. Through simple linear regression, it is found that an increase in family member by 1 brings a decrease in marketed surplus by 2.11 quintals. Availability of market infrastructures, access to inputs and access to credit services are analyzed using rating scales and checklists. Grain varieties marketed through the cooperatives were Maize, Sorghum and Niger seed. The past three successive years’ sales data was taken from the sample societies’ records and analyzed to assess the year-to-year increase/decrease in annual gross sales and gross profit. Constraints of grain marketing performance were found to have two aspects. These are production constraints and marketing constraints. Under production constraints are farmland scarcity, soil degradation, weed and pests, lack of input supply, poor extension services and weather shocks etc. Marketing constraints include lack of capital, lack of timely and accurate market information, lack of storage facilities, poor roads & high transport costs, poor marketing management and lack of trainings on marketing and related business issues.