COOPERATIVES FOR WHOM? 57


cooperative involved in marketing significantly affects the price local traders offer to nonmembers.


Table 4.6 also shows the more restricted benefits in activities not benefi- cial to nonmembers—for example, the allocation of credit, typically in short supply in rural Ethiopia. In 72 percent of the cases where a cooperative gave credit to its members, it was unable to satisfy all its members’ demands. Accordingly, nonmembers access credit from the cooperative in less than 20 percent of all cases.


Finally, we report statistics on the purchase of outputs as an unclassified activity. Indeed, although there are clearly potential economies of scale in output marketing, there are also several risks involved. In many cases, coop- eratives only broker a relationship between buyers (typically, local traders and cooperative unions) and sellers as a means of minimizing the risk of holding unsold output. When a cooperative actually buys smallholders’ surplus output, it often restricts this service to members who share the risk of unsold output (for instance, through a lower share of the profits generated from the collec- tive marketing margins). Thus Table 4.6 shows that in only 2.5 percent of cases does a cooperative buy output from both its members and from nonmembers. Overall, the extent to which cooperatives benefit nonmembers depends on their willingness to engage in activities that are friendly or neutral to outsiders. In many cases, it is likely that poorer households will benefit less, because the gains are likely to be positively linked to the level of production (for instance, access to fertilizer at better prices will be more beneficial to an individual with larger fertilizer needs, that is, someone with a larger farm or landholding). In other cases, where no complementary asset determines the level of benefits—such as training on HIV/AIDS awareness and prevention— poorer nonmembers may benefit just as much as their richer counterparts.


Conclusion


In conclusion, the findings presented here are broadly consistent with Issue 2 of Chapter 1: they suggest that the poorest of the poor tend to face considerable constraints on membership in marketing cooperatives. However, poorer non- member households still benefit from positive spillovers generated by some types of cooperative activities, although these benefits are often limited in comparison to those accruing to members. Finally, it is important to note that data availability limited the nature and depth of the analysis. The geographic spread and role of cooperatives in Ethiopia are also changing. Both consider- ations indicate the need for further data collection and analysis.


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