How do Cooperatives contribute for national growth path? Featured

14 Apr 2018

According to the Federal Cooperative Agency (FCA), nearly 80,000 cooperative unions and associations have been serving the society across the country in providing loan and saving services as well as being a means for accessing basic commodities for rural households. 

Out of the toal, 78,684 are Primary Cooperative Associations while the remaining 370 are Cooperative Unions. Members of the Primary Cooperative Associations have currently reached at 14,902,340. Of these, 10,684,557 are male 4,217,783 are women. This shows that the participation of women is almost 28 per cent. As part of their total capital 15,720,560,928 Birr, they could currently accumulate savings amounted over seven billion Birr.
On the other hand, members of the Cooperative Unions have reached over 11 thousand with a total capital of 3,460,539,792.00 Birr and total savings of 451,723,813 Birr.
Most of the cooperatives have been currently playing indispensable role in ensuring market stability and bringing fair economic benefit to the society both living in urban and rural, particularly in accessing basic commodities such as sugar, oil, and flour with reasonable prices.
Indeed, the Agency has been established with the vision to meet two core targets such as creating strong cooperatives that can improve the living standard of its members both in the rural and urban centers, and to contribute share to the national economic development through various socio-economic policies and strategies.
Cooperatives contribute a lot in creating best market choices, financial access and transporting agricultural products through volunteer participation.
The active participation of cooperatives in the policy and decision making process is useful to build strong democratic culture and in ensuring peace, development and good governance. Direct promotion and participation of cooperatives would enable the market to reach the lower segments of the society in a bid to creating one economic society.
A strengthened cooperative sector can play an instrumental role in agricultural transformation in a way that they can create an organized outlet for surplus agricultural produce by acting as an agent of aggregation, market orientation and commercialization.
In many countries such as the Republic of Korea, The Netherlands, India and Thailand, cooperatives can play roles to support farmers in earning a greater share of their final produce through collective marketing and economies of scale.
In Ethiopia, farmers’ cooperatives currently account for the primary channel through which agricultural inputs reach farmers. Cooperatives in urban areas are also providing more effective input delivery services to urban dwellers despite some complains from those who do not have their own house number and residing in rental houses.
While visiting cooperative associations recently in Addis Ababa, this writer has observed that the government disregarded those living in rental houses to provide access to basic commodities through cooperative associations. Basically, the Associations are not allowed to provide basic commodities to people without residential identity card. As most of the renters are also offensive to allow their rentees to give residential Id card, the Ministry of Trade need to address how to serve these segments of the society at large.
Regardless of these contradictories, the cooperatives are well-functioning and helping smallholder farmers and agro pastoralists to increase their yields and incomes by transforming coo peratives into competitive and efficient business oriented entities.
Thus, Cooperatives are now uplifting the socio-economic lives of millions of households and ensuring food security. In fact, traditional forms of cooperation has begun in the form of “iqub”, which is an association of people having the common objectives of mobilizing resources, especially finance, and distributing it to members on rotating basis. There are still cooperations in the rural farming communities termed as “Jigie”, “Wonfel”, and the like that are used for labour resource mobilization in order to overcome seasonal labour peaks. The other is “idir”, which is a social activity for provision of social and economic insurance for the members in the events of death, accident, damages to property, and the like.
These informal associations continue to operate in Ethiopia as a legal institution since 1950s. Among these, Ethiopian Airlines Workers’ Saving and Credit Cooperative was established in 1956. Currently, cooperatives are recognized as an essential means for socio- economic improvement of the community.
In sum, although Cooperatives have been installed as vital instruments for accessing financial resources, they are currently stabilizing consumer prices, accessing agricultural inputs at reasonable prices, and providing voice for the poor.
To exploit their potentials more, cooperatives need to build their inclusive service delivery system, and enhance the need for realizing market opportunities, in Ethiopia’s wider socio economic conditions. The efforts being made to support cooperatives should be strengthened. Sustained capacity building activities should be provided through training, material and technical support to make the cooperatives as major contributor of the national growth pathways.

BY ZELALEM GIRMA

 

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