Impact of Agricultural Cooperatives on Smallholders’ Technical Efficiency: Evidence from Ethiopia

2013 ◽  
Author(s):  
Gashaw Tadesse Abate ◽  
Gian Nicola Francesconi ◽  
Kindie Getnet
Keyword(s):  
Technical Efficiency ◽  
Agricultural Cooperatives

scholarly journals Do financial constraints impact the technical efficiency of agricultural cooperatives? evidence from Brazil

2021 ◽  
Vol 40 (3) ◽  
pp. 79-95
Author(s):  
Vanessa Schaefer ◽  
João Paulo Augusto Eça ◽  
Marcelo Botelho da Costa Moraes ◽  
Amaury José Rezende
Keyword(s):  
Empirical Evidence ◽  
Technical Efficiency ◽  
Financial Constraints ◽  
Foreign Capital ◽  
Agricultural Cooperatives ◽  
Financial Constraint ◽  
Theoretical Assumptions ◽  
Theoretical Predictions ◽  
The Impact ◽  
The Relationship

Agricultural cooperatives have the main goals of meeting the economic, social and cultural needs of their members. Although they do not seek profits, they must be competitive since they compete with other cooperatives and companies in the market. In this sense, the search for technical efficiency to give cooperatives a better market position contrasts with the difficulty these organizations face in obtaining foreign capital to enable greater investments. There is little empirical evidence, however, of the relationship between financial constraints and technical efficiency in these organizations. According to theoretical assumptions, this relationship could be positive or negative. Thus, this paper analyzes the impact of financial constraints on the technical efficiency of Brazilian agricultural cooperatives. For this, we used two metrics to measure financial constraint and analyzed panel data on 68 Brazilian agricultural cooperatives for the 2005-2014 period. Despite the theoretical predictions, our main results suggest there is no evidence that financial constraints affect technical efficiency. This result can be explained by the characteristics attributed to Brazilian cooperatives, that is, the fact they deal with different commodities (multi-purpose) and do not have strong demand for investments (technology). This paper contributes to the literature both by providing new empirical evidence regarding the relationship between technical efficiency and financial constraints and by introducing a new metric for analyzing financial constraint in the context of cooperatives.

scholarly journals Efficiency and Profitability Analysis of Agricultural Cooperatives in Mpumalanga, South Africa

2018 ◽  
Vol 10 (6) ◽  
pp. 1
Author(s):  
Thembi Xaba ◽  
Nyankomo Marwa ◽  
Babita Mathur-Helm
Keyword(s):  
Decision Making ◽  
Technical Efficiency ◽  
High Efficiency ◽  
Secondary Data ◽  
Agricultural Cooperatives ◽  
Business Context ◽  
Profitability Analysis ◽  
The Matrix ◽  
Low Efficiency ◽  
Using Data

Agricultural cooperatives are expected to generate sustainable profit as they are established as a vehicle of economic development. Efficiency and profitability analysis measures the performance of a firm, and assists management in decision-making through benchmarking with other firms (Marwa & Aziakpono, 2014). To understand the performance of agricultural cooperatives, our study analysed efficiency and profitability using an efficiency-profitability matrix to provide for multi-dimensional analysis. The study used secondary data from annual financial statements for the financial years 2015/16 collected from 19 agricultural cooperatives. Technical efficiency was estimated using Data Envelopment Analysis (DEA) and profitability was estimated using Returns on Assets (ROA). The median scores were 68% for technical efficiency and 10% for profitability. Using the 68% efficiency and 10% profitability benchmark, the matrix separated best performers from low performers. The matrix indicated that 26% of the cooperatives had high-efficiency levels with high profitability (stars), however there was an even distribution between the stars and sleepers: 5 out of 19 cooperatives were sleepers and 5 out of 19 were stars. The majority of the decision-making units (DMUs) at 42% (8 out of 19) are in quadrant 3, categorised as ‘question mark’. These DMUs had low-efficiency scores and low profitability ratios. Only 1 out of 19 cooperatives had high-efficiency levels and low profitability scores. The results demonstrate that technically efficient firms do not always translate to profitable firms: in this regard, management needs to investigate how best to allocate resources in order to remain relevant within the business context and competition. Policy makers need to investigate other drivers of efficiency and profitability when measuring the performance of a firm to influence future policy directives.

scholarly journals ROLE OF TENURE IN THE FESIBILITY OF WHEAT PRODUCTION PROJECTS IN DHI- QAR GOVERNORNORATE

2019 ◽  
Vol 50 (5) ◽  
Author(s):  
Barbaz & Izz al-Din
Keyword(s):  
Technical Efficiency ◽  
Agricultural Development ◽  
Economic Feasibility ◽  
Production Costs ◽  
Wheat Crop ◽  
Agricultural Cooperatives ◽  
Scientific Methods ◽  
Capital Productivity ◽  
Average Production ◽  
Development Plans

Projects of various sizes and types are the most important factors for the success of economic development plans in general. Agricultural projects and agricultural cooperatives are also considered as the basis for agricultural development in the economies of many countries. One of the most important targets of development is to fight poverty and famine, and achieving that depends on how to deal with agricultural lands with good management and scientific methods. The aim of this research is to identify the economic feasibility of one of the agricultural activities in the province of Dhi Qar. The study included 132 farms specialized in the cultivation of wheat crop in the province of Dhi Qar for the agricultural season 2017-2018. The results of the research showed that the projects in the province have economic and technical efficiency and proved the results of the economic feasibility criteria of investment in such projects. The researchers found that the size of the possession 30-50 dunums has both productive and technical efficiency, while the farmers with holdings of more than 50 dunums has the best economic efficiency in the use of available resources, despite the low productivity if the return on investment about 188% in small farms, while the profitability of about 119% dinars, while the capital productivity amounted to about 2.081 dinars, and therefore the researchers recommended the need to encourage investment in the large plants given their ability to absorb technology, reduce average production costs and intensify other resources.

scholarly journals Does agricultural cooperative membership impact technical efficiency of maize production in Nigeria: An analysis correcting for biases from observed and unobserved attributes

PLoS ONE ◽  
2021 ◽  
Vol 16 (1) ◽  
pp. e0245426
Author(s):  
Kehinde Oluseyi Olagunju ◽  
Adebayo Isaiah Ogunniyi ◽  
Zainab Oyetunde-Usman ◽  
Abiodun Olusola Omotayo ◽  
Bola Amoke Awotide
Keyword(s):  
Technical Efficiency ◽  
Agricultural Development ◽  
Smallholder Farmers ◽  
Sample Selection ◽  
Agricultural Cooperatives ◽  
Stochastic Production Frontier ◽  
Maize Production ◽  
Multiple Production ◽  
Agricultural Cooperative ◽  
The Impact

The formation of agricultural cooperatives has been widely promoted as an agricultural development policy initiative to help smallholder farmers cope with multiple production and marketing challenges. Using a nationally representative survey dataset of smallholder maize producers from rural Nigeria, this study assesses the impact of agricultural cooperative membership on technical efficiency (TE). We based our estimation approach on the combination of a newly developed sample selection stochastic production frontier model with propensity score matching to control for possible selectivity biases from both observables and unobservables. We estimate stochastic meta-frontiers to examine TE differences between cooperative members and non-members. Our results reveal that TE levels of members are consistently higher than that of non-members. This calls for continued policy incentives targeted at encouraging farmers to form as well as participate in agricultural cooperatives.

scholarly journals Efficiency and Profitability Analysis of Agricultural Cooperatives in Mpumalanga, South Africa

2018 ◽  
Vol 10 (6(J)) ◽  
pp. 1-10
Author(s):  
Thembi Xaba ◽  
Nyankomo Marwa ◽  
Babita Mathur-Helm
Keyword(s):  
Decision Making ◽  
Technical Efficiency ◽  
High Efficiency ◽  
Secondary Data ◽  
Agricultural Cooperatives ◽  
Business Context ◽  
Profitability Analysis ◽  
The Matrix ◽  
Low Efficiency ◽  
Using Data

Agricultural cooperatives are expected to generate sustainable profit as they are established as a vehicle of economic development. Efficiency and profitability analysis measures the performance of a firm, and assists management in decision-making through benchmarking with other firms (Marwa & Aziakpono, 2014). To understand the performance of agricultural cooperatives, our study analysed efficiency and profitability using an efficiency-profitability matrix to provide for multi-dimensional analysis. The study used secondary data from annual financial statements for the financial years 2015/16 collected from 19 agricultural cooperatives. Technical efficiency was estimated using Data Envelopment Analysis (DEA) and profitability was estimated using Returns on Assets (ROA). The median scores were 68% for technical efficiency and 10% for profitability. Using the 68% efficiency and 10% profitability benchmark, the matrix separated best performers from low performers. The matrix indicated that 26% of the cooperatives had high-efficiency levels with high profitability (stars), however there was an even distribution between the stars and sleepers: 5 out of 19 cooperatives were sleepers and 5 out of 19 were stars. The majority of the decision-making units (DMUs) at 42% (8 out of 19) are in quadrant 3, categorised as ‘question mark’. These DMUs had low-efficiency scores and low profitability ratios. Only 1 out of 19 cooperatives had high-efficiency levels and low profitability scores. The results demonstrate that technically efficient firms do not always translate to profitable firms: in this regard, management needs to investigate how best to allocate resources in order to remain relevant within the business context and competition. Policy makers need to investigate other drivers of efficiency and profitability when measuring the performance of a firm to influence future policy directives.

scholarly journals Effects of Agricultural Cooperative Society on Farmers’ Technical Efficiency: Evidence from Stochastic Frontier Analysis

2020 ◽  
Vol 12 (19) ◽  
pp. 8194
Author(s):  
Ruopin Qu ◽  
Yongchang Wu ◽  
Jing Chen ◽  
Glyn D. Jones ◽  
Wenjing Li ◽  
...  
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Direct Marketing ◽  
Stochastic Frontier ◽  
Agricultural Cooperatives ◽  
Stochastic Production Frontier ◽  
Frontier Analysis ◽  
Agricultural Cooperative ◽  
Marketing Service ◽  
The Impact

The impact of agricultural cooperatives on apple farmers’ technical efficiency (TE) in China was examined. The cooperatives were divided into two groups: a collective marketing group for farmers and an equivalent non-marketing group that did not provide a marketing service, although other functions remained the same. Using the propensity score matching (PSM) procedure and stochastic production frontier (SPF) modelling, cooperatives’ key functions that potentially increase farmers’ TE can be identified. The results indicate that membership of either group is positively related to yield. However, cooperatives that were not engaged in marketing achieved higher TE than non-members. This suggests that policy makers should encourage cooperatives to focus on activities that do not include direct marketing to increase TE in apple production in China.

Do bottom-up and independent agricultural cooperatives really perform better? Insights from a technical efficiency analysis in Ethiopia

Agrekon ◽  
2019 ◽  
Vol 59 (1) ◽  
pp. 93-109 ◽  
Author(s):  
Tafesse W. Gezahegn ◽  
Steven Van Passel ◽  
Tekeste Berhanu ◽  
Marijke D’haese ◽  
Miet Maertens
Keyword(s):  
Technical Efficiency ◽  
Efficiency Analysis ◽  
Agricultural Cooperatives ◽  
Bottom Up
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