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# Agricultural cooperative membership and welfare of maize farmers in Ethiopia: Insights from panel data analysis

## Details

**Authors** Abebayehu Girma Geffersa

**Year** 2024

**Publisher** Annals of Public and Cooperative Economics

**Kind of work** article

**Discipline** Economics

**Secondary disciplines** Agriculture & Food

**Applied** false

[Read it at the publisher](https://doi.org/10.1111/apce.12481) 
10.1111/apce.12481

## In authors' words

### Abstract

The emergence of agricultural cooperatives is widely viewed as a potential institutional arrangement that can help achieve rural poverty reduction by improving farmers' welfare in developing countries. However, empirical evidence on the effect of cooperative membership on welfare and rural poverty in sub-Saharan Africa remains limited. This paper examines the effect of cooperative membership on the welfare and poverty levels of maize-farming households, using a comprehensive three-wave panel dataset from three major maize-producing regions in Ethiopia. The welfare effect of cooperative membership was estimated using a correlated random-effects regression with a control function to account for unobservable heterogeneity and the endogeneity of cooperative membership. The findings show that cooperative membership significantly increased maize yield and enhanced the welfare of maize farmers by improving household income, subsequently leading to reductions in the prevalence of income poverty and the poverty gap. Further analysis reveals that while cooperative membership is pro-poor in terms of its effect on maize yield, its effect on income and poverty tends to favour wealthier members with greater assets and extended landholdings. In this light, supporting poor and marginalized farmers with the resources needed would help improve the welfare gains from cooperative membership, thereby ensuring a more inclusive approach to poverty reduction.

### What they set out to do (purpose)

To estimate the causal effect of agricultural-cooperative membership on smallholder household welfare and poverty among maize farmers, and to test whether that effect is distributionally pro-poor.

### Who or what was studied (sample)

A three-wave household panel dataset of maize-farming households across three major maize-producing regions of Ethiopia.

### How they did it (methods)

Correlated random-effects panel regression with a control-function approach to correct for unobserved heterogeneity and endogenous self-selection into cooperative membership, plus subgroup analysis by wealth and landholding.

### What they found (results)

Cooperative membership significantly raised maize yields and household income and reduced income poverty and the poverty gap among Ethiopian maize farmers overall, but the income and poverty benefits were captured disproportionately by wealthier, larger-landholding member households rather than the poorest members.

## Commentary

### In short

An intermediate cooperative institution mediates the flow of economic benefit between the individual household and the larger market system, and the strength of that mediating relationship itself depends on the household's existing position within the system.

**Patterns it shows** S, R

**Added** 2026-09-22

**How to cite this** Abebayehu Girma Geffersa (2024). Agricultural cooperative membership and welfare of maize farmers in Ethiopia: Insights from panel data analysis. Annals of Public and Cooperative Economics.