The role of dairy cooperatives in stimulating innovation and market oriented smallholders development: the case of Ada’a dairy cooperative, Central Ethiopia
For an agriculturally dependent country like Ethiopia, dairy development has enormous scope for rural development and national prosperity. Dairy cooperatives are needed to consolidate the efforts of small producers to provide processing and transport facilities on a large scale. Organizing farmers through dairy co-operatives can have many advantages over individual farming. First, co-operatives can improve or facilitate access to market information, reduce costs of marketing and can increase producers’ access to technology, extension and related services, and thereby enhance efficiency in the process of production and marketing of dairy products. Second, dairy marketing co-operatives can help to decrease transaction costs and price risks, and enhance bargaining power of dairy producers. These lead to increased return from commercial dairying which in turn stimulates innovation in the sector. This study was undertaken to explore the role of dairy cooperatives in stimulating innovation and market oriented smallholders’ development by taking Ada’a dairy cooperative as a case study. It entails the specific objectives of investigating the role of the cooperative in promoting innovations, linkages for access to services and marketing and enhancing knowledge and information sharing. Primary data were collected from 150 smallholder dairy producer members of the cooperative. This was supplemented by information from focused group discussion with dairy producers, board members of the cooperative and key informants. The study result showed that the cooperative has started to enhance innovations in the dairy sector which include technological, institutional and organizational innovations, promoting linkages for access to marketing and services and in sharing knowledge and information. With regards to technological innovation the cooperative introduced milk processing using its own processing machine and started to produce quality products as pasteurized milk, butter and cheese. The cooperative had many activities with regards to institutional innovation, which include: provision of dairy inputs, marketing, creating employment opportunities, having well designed organizational and financial systems and addressing development issues. Organizationally there was weak interaction among members and board members of the cooperative. The cooperative is performing good in promoting market oriented dairy development through creating market link to the urban and peri-urban subsystems, collaborating with other dairy associations, public organizations, NGOs, projects and donors affiliated on MODD. The cooperative has been sharing dairy related knowledge and information by providing training and advisory services; based on that 55% of the sample respondents have got training on dairy production and marketing through the cooperative during the last three years; and all sample members of the cooperative have got advisory services using innovative members and staff members of the cooperative ( 85.33%), staff of the district agricultural office (8%), NGOs (4.67%) and DzARC (2%)
