Economic Impact of Farming Cooperatives in East Africa

Abstract

This report identified evidence on the economic impacts of agricultural cooperatives in Ethiopia, Kenya, Rwanda, Tanzania and Uganda. The report begins with a discussion on the impact on productivity, income and welfare. Next section analyses the agricultural markets for cooperative farmers in East Africa and also discusses the impact of cooperatives on women, youth and social development. Evidence for the economic benefits of cooperatives were found. However, positive results were not found for all involved and heterogeneity was often found within results. Benefits when identified were often skewed towards those with more land and higher education levels rather than the poorest. Islam et al.’s (2015) review of developing countries suggests that poorer farmers are often excluded from cooperative membership altogether. It would seem that the way a cooperative is run and the length of time a cooperative has been running also effects results. There are many different factors that affect productivity that need to be considered. Another point to note is that increased productivity may be detrimental to product quality and to the environment. The majority of the research identified for this report was from Ethiopia. Some research was identified on Kenya and Rwanda, and very little on Tanzania and Uganda. K4D helpdesk reports provide summaries of current research, evidence and lessons learned. This report was commissioned by the UK Department for International Development