An Assessemt of the Performance of Co-Operatives and Their Implications for Local Economic Development: The Case of Selected Co-Operatives in Ada' A Woreda, Oromiy A Regional State

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Addis Ababa University


The study is conducted with the main objective of assessing the performance of co-operatives and their implication for local economic developmenl. An al/empt is made to see the place of co-operatives in providing input and output marketing services, capital accumulalion and asset building, employment creation and community income diversification. To this end, nineteen primary societies (which are broadly divided in to five categories depending on the area of their activities) are selected and studied. The study used primary data from in-depth interview with the leaders of study co-operatives, interview with officials from relevant bureaus, focus group discussions with member beneficiaries, personal observations and documentary materials. Secondary data are also collected from different co-operatives bureaus and other sources and used to supplement primary data. Simple descriptive statistical tools such as percentages, averages and the like are used in presenting the results. Generally, the study found that agricultural input supply and product marketing (such as dairy products, minerals, and vegetables) are among the valuable marketing services being provided by some study co-operatives to the local community (especially the members), though the grain marketing service, which is provided by some of them, is far from being adequate. Besides, some co-operalives are doing well in the area of developing rural finance proper, local resource mobilization and capital accumulation, asset building, employment creation and communities' income diversification; while some others are not performing remarkably with this regard so far. Moreover, the role being played by some study cooperatives in the area of technology diJjiJsions, linking local communities with difftrent stakeholders within and outside the locality, and provision of social safety net services sounds promising starts. It is also realized that the services by these co-operatives are encouragingly contributing towards the bel/erment of local communities' livelihood, and the development of local economy. Yet, it is understood from the study that myriads of problems are deterring the realization of the development potential of these co-operatives. Some of the major problems indicated in many cases are inadequate financial capacity; lack of human resources (such as qualified, visionary and commit/ed leadership); inadequate awareness and participation of members invarious ajfairs of their co-operatives; and absence of adequate, sustainable, relevant action oriented training opportunity (both for the leaders and the member.l); lack of dependable market; and no or limited access to various technologies. Besides, others problems such as intensive competition from private sectors; limited information communication networh with different parties; and lack of infrastructures such as ojjice, warehouse, roads; and inadequate governmen/ support are also mentioned in some cases with varying degrees of seriousness. Hence, to realize the immense development aptitude of these institutions in the area of input and output marketing, resource mobilization, capital accumulation, employment creation and communi/ies'income diversifica/ion, and in o/her socio-economic arenas, /0 /he bes/ merit of the locali/y and local communi/y, priori/y based reac/ion to /he aforementioned problems should be given appropria/e emphasis.



for Local Economic Development