16 CHAPTER 2
Table 2.2 Rural organizations during Ethiopia’s Derg regime, 1988–89 Number of household
Number of
Type of organization Peasant associations
Producer cooperatives Service cooperatives
Number 20,455
3,732 4,052
members (million) 5.7
0.3 4.5
kebeles covered n.a.
n.a. 17,785
Sources: Adapted from Rahmato (1994a); Kodama (2007). Note: n.a. means not available. A kebele is a peasant association, the smallest administrative unit in Ethiopia.
local level, and promoting a socialist ideology. Farmers came to view these cooperatives—as well as their state-appointed leaders—as synonymous with government oppression. It was not until 1989 that some degree of liberaliza- tion was introduced, though it proved to be too little and too late, as the Derg was overthrown by 1991.
Policies Supporting a New Generation of Cooperatives Since 1994, the GoE has made efforts to promote a generation of coopera- tives that differ from their predecessors. The new type of cooperative should be (1) based on “peasants’ free will to organize”; (2) able to fully participate in the free market; and (3) free of government intervention in their internal affairs (Proclamation 85/1994, published in FDRE [1994], 1). Legal reforms in 1998 and 2004 were introduced to reinforce these principles and strengthen membership incentives by improving members’ rights in the areas of owner- ship, voting, share transfers, and risk management (Proclamations 147/1998 and 402/2004, published in FDRE [1998] and FDRE [2004], respectively; Rah- mato 2002). The reforms are meant to ensure that cooperatives are governed in accordance with standard bylaws that provide for regular election of chair- persons and management committees and for voting based on the principle of one member, one vote. In the broadest terms, these reforms are designed to create a new generation of cooperatives in Ethiopia that are voluntary, inclusive, and accountable, in stark contrast to the cooperatives formed under Ethiopia’s previous regime.
The GoE’s various poverty-reduction strategy papers also reflect its sup- port for cooperatives. For example, Ethiopia’s Sustainable Development and Poverty Reduction Program (FDRE 2002, 43) includes cooperatives as one of its main goals for agricultural development: “to organize, strengthen and diversify autonomous cooperatives to provide better marketing services and serve as a bridge between small farmers (peasants) and the non-peasant pri- vate sector.” Cooperatives are also expected to
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