Performance Evaluation of Coffee Marketing Cooperatives Union : The case of Chercher Oda Blttom Farmers Cooperatives Union in West Harerghe Zone Oromia Region, Ethiopia

Abstract

Ethiopia is among the poorest countries in the world where agriculture is the major source of living for more than 83% of its people. The agriculture sector is dominant in the national economy. However, its performance in production and productivity is poor to bring sustainable changes in the living standards of the rural community. Among others, underdeveloped agricultural marketing system is a chief factor responsible for the poor performance of the sector. Nevertheless, the principal factor for the low income per household in the Ethiopian rural society especially farmers in the study area is the problem of the market that can govern the economic development of any development sector. Thus, the overall objective of the study is to analyze marketing performance of coffee marketing farmers’ cooperatives union and members’ satisfaction in west Harerghe Zone Oromia Regional state of Ethiopia. To see the performance of cooperatives union, emphasis was given for evaluating their overall marketing performances; ratio analysis Marketing Margin analysis, market share coverage analysis and members’ participation and satisfaction as well as perceived problems in using the available services. To accomplish this, a two stage sampling technique was applied. The first stage involves purposive sampling of 5 primaries coffee marketing cooperatives from the 15 coffee marketing primary cooperatives in which one primary cooperative selected from each five district bounded with in Chercher Oda Bulttom coffee marketing farmers’ cooperatives union. In the second stage, random sampling of individual member farm households was employed. Fourteen coffee trades were also randomly sampled and assessed to analyze their market behavior. A total of 120 member households of cooperatives were considered for this study and was included in the econometric model. In addition, secondary data obtained from relevant institutions were used. Simple percentage analysis, ratio analysis, descriptive and econometrics model was employed to identify determinants of the performance of cooperatives in achieving their objectives and participation of the members. As a result, although the coffee marketing cooperatives union was efficient in reference to computed efficiency ratios and in minimizing total gross marketing margin, the overall performance was inefficient due to the shortcoming in the performance of market share coverage and service provision. As the result computed from probit regression model indicates, Total Land Holding, Total Family Size and Total Number of Members negatively influence the overall satisfaction of members at 1% level of significance while Education Level is negatively associated with the satisfaction of members on the overall performance of cooperatives union at 5% level of significance. The Total Live Stock Holding is also positively associated with the satisfaction of members on the overall performance of cooperatives at 5% level of significance.