Determinants of farmers’ participation in agricultural production cooperatives and impact of cooperative membership on farm income in Liberia

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MAY, 2016
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Since the end of the civil war in 2005, more emphasis has been placed on smallholder farmers, and agricultural cooperative have been targeted as means of reaching to rural farmers and to reduce poverty. The government and its partners continue to provide supports for farmers through cooperative societies to help them increase their farm productivity as well as overcome market challenges. In spite of these benefits derivable from cooperatives, low farmers’ participation continues to be recorded in the country. This study was therefore meant to identify the determinants of farmers’ participation in agricultural production cooperatives and the impact of cooperative membership on farm income in three cooperative concentrated counties of Liberia-Bong, Nimba and Lofa Counties. Cross-sectional data was collected from a sample of 400 farmers (250 cooperative members and 150 non-members) using a multistage sampling technique. Structured questionnaire was used to collect data and the endogenous switching regression model was implemented for analysis. The study identified training, opportunity to buy and sell to cooperatives, improved prices, collective bargaining power, and access to credit as the services farmers receive from cooperative societies in the study area. Using Kendall’s coefficient of concordance, use of primitive tools, pests and diseases, high post- harvest loses, unavailability of improved seeds, high costs of agrochemicals, and low yield are the major constraints faced by cooperative members. The study also identified human resources, inadequate equity capital, planning, inefficient use of resources, communicating cooperative values to the public and educating and recruiting youths as the key challenges confronting cooperative societies. The endogenous switching regression technique was employed to identify determinants of participation and evaluate the impact of cooperative membership on farm income. The study found gender, age, extension services, access to credit, farmers’ perceptions that cooperatives are not managed efficiently and that cooperatives help members attain higher standard of living through higher profits as the key factors that significantly influence farmers’ decision to participate in agricultural production iv cooperatives. Cooperatives in the study area are positively impacting members’ farm income. There was a significant difference between average farm incomes of cooperative members and non-members. Participation in cooperatives increased members’ farm income by 55%. Increasing farmers understanding of cooperative principles and the benefits thereof as well as helping cooperative societies improve their management performance were recommended to ensure increased farmers’ participation.
A thesis submitted to the Department of Agricultural Economics, Agribusiness, and Extension, Faculty of Agriculture, College of Agriculture and Natural Resources in partial fulfilment of the requirements for the Degree of Master of Philosophy Agricultural Economics,