13 February 2018

Ethiopia: Cooperative Associations Improving Livelihood of Millions

History witnesses that the beginning of cooperative associations passed more than one and half centuries, following the social crisis created by the industrial revolution. In Ethiopia, sources show that cooperative organizations have the history of beyond a half century. The first legal base for establishment of cooperative associations was also declared in early 1960. Since then, the developments of cooperative organizations and associations have passed through different dynamisms. However, until the end of 1990s, the cooperative associations are very much specific in scope and limited in functioning. And they were mostly limited to the union of farmers in specific item of production like coffee.

The first comprehensive and well established rule has been declared at the end of 1990s with the aims of incorporating all kinds of cooperatives, increasing and strengthening their roles, answering the peoples interest and enabling institutional uniformity that make possible the provision of professional support they need.

As a result of these efforts, the number of cooperative associations has been developed from 245 in 2010 to 381 in 2017. This progress is accompanied by the increasing of basic cooperative associations, from 38454 in 2010 to 82, 089 in 2017. In the same way, the number of union members of cooperatives has managed to develop from 6,792 in 2010 to 14,135 in 2017. These developments of cooperative associations, basic cooperatives, and unions in general encompass nearly 18 million peoples as members. From this, about 30 percent of the members are females with annual development rate of 27 percent.

Federal Cooperative Agency Plan, Project and Information Director Abdo Adem explained, at the opening of National Cooperative Exhibition and Symposium, these cooperatives are bringing astonishing development in agricultural products trading with creation of market opportunity both for producers and consumers by encouraging savings and supplying loans in value adding on agricultural products and expanding investment and also in mining extraction and selling streams.

He also said that cooperatives are working with the vision: "To see cooperative associations that ensure improvement of members' lives that have big role on country's economic development by 2025." To support this effort, the government have established agency that have the mission to strengthen and facilitate the organization of cooperatives, build their capacity through developing their market share and improving their legality and protection to create cooperative associations that ensure the benefits of their members.

Accordingly, right now cooperatives are providing the meaningful benefits for their members, farmers or producers of agricultural products in general and most importantly, they are playing significant role in stabilizing market.

Directress of Oromia Agricultural Cooperative Associations Askeberech Belayneh for her part told The Ethiopian Herald, "Cooperative associations are organizations that benefit farmers first by providing them with agricultural inputs like different chemicals, improved species with avoiding increase of payment as a result of different market chains commission and by providing them with market opportunities timely and cost effectively." They focus on products like fruit and vegetables since they are time sensitive. Unfortunately, farmers previuosly were obliged to sell with lowest price and hardly pay their effort. But now, with presence of cooperative unions and associations, market opportunities have been improved and the products could easily transported directly to the market without redundancy of chained market system, she added.

Abdu also added that cooperatives are stabilizing market through controlling price, since they provide goods particularly agricultural products directly from farming plots with improved transportation system. These in turn protect consumers from unwanted expenditures and give them access to fresh and standardized products.

According to Abdo, only from 2010 t0 2017 the general exchange made by cooperatives exceeds 41 billion Birr. More than 5,141kg gold and 79,259kg tantalum have been supplied to National Bank by 691 producers and cooperative associations. They have also contributing big role to the country's export trade and accordingly in the past seven years their share of export trade reaches beyond a half billion dollar.

However, beyond this bright success of cooperative associations, Abdu mentioned that there are several problems they are struggling with. Among these problems; the limitation in insuring members ownership and decision making condition, the absence of comprehensive awareness concerning the significance of cooperative associations, the insufficient market network in comparison to the existing demand, lack of skilled manpower in administration of cooperative structures, the absence of excellence center supports development of cooperatives and the insufficiency of supports from concerned bodies to the cooperatives foreign trade share. While these are the major problems cooperatives are facing, there are also other problems that are threatening their holistic development, both at federal and state level.

Therefore, in order to see strong cooperative associations that can make sure the benefits of their million members to the best possible stage and play significant role in building countries economic development, concerned bodies of public offices both at federal and states level should give relevant and on demand support to cooperative associations. As Askeberech stressed, if cooperative associations get enough support from concerned bodies, they can play important role beyond existing imagination, by addressing more and more members and enhancing the agricultural and industrial transformation of the country.

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