Eshetu Tefera and Assefa Gebre Habte Wold
The objectives of the study were to examine the financial performance of dairy marketing cooperatives and to identify the major factors that affect households’ participation in these cooperatives. LemuAraya and Bekoji dairy marketing cooperatives were purposively selected and 40 members and 100 non-members respondents were used for primary data collection. Ratios were analysed taking the three years’ financial data (2010, 2011 and 2012). The liquidity analysis showed that the cooperatives under investigation performed above the desirable standard. The three years’ data of how the cooperatives financed showed that creditors have supplied on average 21.5% of the cooperatives finance. The profitability ratio of the cooperatives showed that it was weak. In this regard Lemu-Araya dairy marketing cooperative earned a return on its asset below the interest rate of the financial institution extend credit (4%). Descriptive statistics were used to compare the socio-economic, the attitudes towards their cooperatives, services rendered by the cooperatives and other institutional characteristics of the members and non-members of the cooperatives. Testing differences between two samples were done using T-test and Chi-square test. To identify the factors influencing farmers’ participation in dairy marketing cooperatives, Logit regression model was used. The model results revealed that among thirteen explanatory variables hypothesized to affect farmers' participation in dairy marketing cooperatives; eleven were found to be statistically significant. Among these significant variables family size and distance of the cooperative milk collection centre from the farmers’ house, were found to be significantly and negatively related to the participation of dairy producer farmers in dairy marketing cooperatives. On the contrary, cooperatives price for milk and availability of other marketing agents were not significant as opposed to the expected.
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