Agricultural cooperatives and rural livelihoods: Evidence from Ethiopia

Agricultural cooperatives are important rural organizations supporting livelihood development and poverty reduction. In recognition of such roles of cooperatives, Ethiopia showed a renewed interest in recent years in promoting cooperative sector development. However, there is lack of a wider and systematic analysis to produce sufficient empirical evidence on the livelihood development and poverty reduction impacts of cooperatives in the country. Using a matching technique on rural household income, saving, agricultural input expenditure and asset accumulation as indicator variables, this paper evaluates the livelihood impact of agricultural cooperatives in Sidama zone, Ethiopia. The finding shows that cooperatives improved the livelihoods of service user farmers through impacting better income, more savings and reduced input costs. In view of such evidence, further promotion, deepening and supporting of agricultural cooperatives is recommended. © 2012 The Authors Annals of Public and Cooperative Economics © 2012 CIRIEC.