Social and environmental impacts of agricultural cooperatives: evidence from Ethiopia

Abstract

Cooperatives are considered as potential organizational vehicles for sustainable development due to their multiple objectives and diverse roles. In particular, a lot is expected from agricultural cooperatives since they depend mainly on natural resource-based activities where sustainability issues are central concerns. Using household survey data of 305 coffee farmers from Ethiopia, the impacts of cooperative membership on farmers’ social and environmental performances are examined. Findings, based on propensity scores matching, show a significant positive impact of cooperatives on members’ social capital including trust, commitment and satisfaction, and on human capital such as training sessions received and experiences gained. However, farmers’ environmental performance is negatively associated with membership contrary to expectations. The findings suggest further efforts that need to be made by agricultural cooperatives to improve the environmental performance of farmers, while the accumulated human and social capitals are encouraging and can ease future collective actions toward cares for the environment and future generations.

Keywords:

• coffee cooperatives
• Ethiopia
• environment
• human capital
• impact evaluation
• propensity score matching
• social capital
• sustainability

Notes

1. Ethiopian Birr (ETB) is the Ethiopian national currency; 1 USD is approximately equal to 20 ETB.

2. Eco-certifications are awarded for commodities produced and marketed, taking into account one or more aspects of sustainability. The certifications are granted (and renewable) by one or more organizations that include Fair Trade, Organic, UTZ Kapeh, and Rainforest Alliance in this study.

3. This item is reversed (by subtracting 6 from each observation of the variable and taking the absolute value) since it has an opposite sign compared with other items.

Additional information

Funding

The first author would like to express his gratitude for the partial research funding (Scholarship) kindly provided by the Free University of Bozen/Bolzano and the regional government. Different supports and assistances offered during field survey are highly appreciated.