Does Membership in Seed Producer Cooperatives Improve Smallholders Teff

Received: 28 March 2023 Revised: 4 December 2023 Accepted: 23 December 2023
DOI: 10.1111/apce.12466
ORIGINAL ARTICLE
Does membership in seed producer cooperatives

improve smallholders’ teff productivity? A
comparative analysis in North Ethiopia
Nahusenay Teamer Gebrehiwot1 Tafesse W. Gezahegn1

Aradom Gebrekidan Abbay1 Tesfay Gebrehiwet Entehabu1
Alemtsehay Tsegay Beyene2 Asfafaw Haileslassie Tesfay3
Kifle Tesfamariam Sebhatu1
1 College of Business and Economics,
Mekelle University, Mekelle, Tigray, Abstract

Ethiopia Although teff (Eragrostis tef) is a very important sta-
2 Collegeof Dryland Agriculture and ple food crop in Ethiopia, its production is constrained
Natural Resources, Mekelle University,
Mekelle, Tigray, Ethiopia by low productivity due to poor access and adoption
3 Institute
of Energy, Mekelle University, rate of improved seed by farmers. The government of
Mekelle, Tigray, Ethiopia Ethiopia envisions realizing an efficient teff value chain
that enables a sustainable increase of smallholder teff
Correspondence
Tafesse W. Gezahegn, College of Business productivity. As a result, the government is supporting
and Economics, Mekelle University, seed producer cooperatives (SPCs) to supply improved
Mekelle, Tigray, Ethiopia.
Email: tafpeace@gmail.com
teff seeds to farmers. The aim of this study is to com-
pare teff productivity at household level among members
Funding information and nonmembers of SPCs. To this end, a cross-sectional
Mekelle University, Grant/Award
Numbers: survey design with multi-stage sampling method was
RPDO/CBE/Medium/Recurrent/002/2010, used to select 386 sample households (193 SPC members
29 Jan 2018
and 193 nonmembers). As membership in a cooperative
is voluntary, farmers may self-select into a given SPC
according to their own motivation and interest. In a bid
to address the potential issue of selection bias from both
observed and unobserved heterogeneities, we employ
the treatment effects model (TEM), which allows for a
specific correlation structure between the unobservables
that affect the treatment and the unobservables that
© 2024 Edgard Milhaud Foundation.
Ann Public Coop Econ. 2024;1–17. wileyonlinelibrary.com/journal/apce 1

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2 T. GEZAHEGN et al.
affect the potential outcomes. Results show that, on

average, SPC members produce 1.406 more quintals per
hectare compared with their nonmember counterparts.
KEYWORDS
improved seed, seed producer cooperatives, teff, Tigray
J E L C L A S S I F I C AT I O N
J54, Q12, Q13
1 INTRODUCTION
Agriculture is the main economic sector in Sub-Saharan Africa. However, its performance is
challenged by many factors, mainly the access to production inputs and technologies (World
Bank, 2008). For decades, policymakers regarded collective action groups, such as farmer-based
organizations or agricultural cooperatives, as important tools to address these challenges and
improve agricultural performance (Salifu et al., 2010). Despite accelerating globalization and eco-
nomic growth, food security in most developing countries is still a problem (Funk & Brown,
2009). According to World Bank (2008) and Hazell et al. (2010), smallholder agriculture is argued
to remain an important sector for economic development and poverty reduction in developing
countries. FAO and ICRISAT (2015) assert that quality seed is a key input for agriculture, with
a direct impact on production and productivity. In this regard, an effective and efficient seed
supply system is very crucial for food security and economic growth of a nation (Shimelis &
Hussein, 2013).
According to Hellin et al. (2008), farmer organizations are seen as a key factor in enhancing
farmers’ economic growth and food security. In support of this view, Woldegebriel et al. (2013) sug-
gested that cooperatives in rural areas help smallholder farmers increase their yields and incomes
through efficient and high-quality distribution of agricultural inputs, linkage of outputs to mar-
kets, and provision of value-added services. In this regard, the government of Ethiopia has realized
the importance of cooperatives as a vehicle to improve poverty status amongst resource-poor farm-
ers (Getnet & Anullo, 2012). To facilitate seed production and distribution, community-based seed
production (CBSP) system has been popular in recent years for seed production and marketing of
low volume low value seeds, such as cereals (Shimelis & Hussein, 2013).
The overall vision of the Government of Ethiopia, as described by the ATA (2012), is “an effi-
cient and well-functioning teff value chain that enables a sustainable increase of smallholder
teff productivity and profitability while providing high-quality output at an affordable price to
consumers”. In line with this vision, the contribution of seed producer cooperatives (SPCs) has
received considerable attention and is considered as one of the core strategies for agricultural
development. With the intervention and support of the government, nowadays, the SPCs are sup-
plying seeds of diversified crops and varieties trying to satisfy the local demand of the farmers
(ATA, 2015).
The major constraints in teff production are low productivity due to the low adoption rate and
poor access to improved seed by farmers (Kebebew et al., 2011). This can be supported by the fact
that less than 1% of the teff area was cultivated with improved seed from the formal sector (CSA,
2012b). These all indicate low productivity of teff and very limited use of improved teff seed. Some
SMALLHOLDERS’ COOPERATIVE MEMBERSHIP AND TEFF PRODUCTIVITY 3
of the previous studies done by scholars, such as Hailu et al. (2015) focus on agricultural tech-
nologies, application of fertilizers, farmers’ adoption level of row planting technology, technical
efficiency in teff production and production constraints. However, such studies do not give much
attention to identifying the role of community-based teff SPCs.
The contribution of SPCs is important to determine whether these community-based organi-
zations can in fact help the Ethiopian government in achieving the vital goal of food security
and poverty reduction in the future. This calls for rigorous context-specific empirical studies that
closely look at the factors influencing teff production operating under diverse natural and socio-
economic settings. There is a need for studying the performance of each community-based teff
SPC at district level in the context of its operational environment. To the best of our knowledge,
this paper is the first to provide an in-depth empirical analysis on the contribution of community-
based teff SPCs in Tigray. Most of the previous studies on teff production were conducted in high
production areas (Oromiya and Amhara regional states) and little attention was given to Tigray.
Therefore, Tigray and community-based teff SPCs were purposively selected for the study at hand.
The aim of the study is to compare teff productivity at household level among members and non-
members of SPCs, and identify the socioeconomic variables affecting teff production in Northern
Ethiopia.
1.1 Trends of teff production and productivity in Ethiopia
Teff (Eragrostis tef (Zucc.)) is the staple food crop for most of the Ethiopian population. Based on
the report of Ethiopian Central Statistics Agency (CSA, 2017), about 6.7 million smallholder farm-
ers were engaged in teff production in 2017/18 in Ethiopia, covering more than 3 million hectares of
land and producing 52.8 million quintals of teff yearly. The average national productivity is 17.48
quintal per hectare (CSA, 2017; Cochrane & Bekele, 2018). National level yearly teff production
increased from 21,755,976.79 quintals in 2005/06 per year to 52,834,011.56 quintals in 2017/18 with
an average annual growth rate of 9.68 %. Likewise, the number of teff producers has increased
from 5,177,125 in 2005/06 to 6,771,977 in 2017/18 with average growth rate of 10.90 % per annum;
and the area covered by teff crops throughout the nation increased from 2,246,016.59 ha in 2005/06
to 3,023,283.50 ha in 2017/18, which shows average growth rate of 11.22 % per annum (CSA, 2017).
Mostly, teff is produced by smallholder farmers at the central, eastern, and northern highlands
of the country (Birara, 2017) being the dominant cereal in 83 high-potential agricultural districts,
covering the highest area planted in the country (Cannarozzi et al., 2014; Girma et al., 2014).
Teff can grow under a wide variety of agro-climatic conditions, such as elevations from zero to
2,800 meters above sea level (masl), wide variety of moisture, temperature, and soil conditions.
Its optimal growing conditions with 1800–2100 masl, average annual rainfall of 750–1000 mm, and
average annual temperature of 10–27◦ C (Chamberlin & Schmidt, 2012). However, there are con-
siderable variations in the productivity of plots growing teff across Ethiopia. According to Hailu
et al. (2015) the major drivers of productivity differences appear to be the levels of input use, the
management practices employed, the age of the operator, the ease of access to markets, and the
level of engagement in extension efforts.
Although its land productivity lags behind major cereals, such as maize and wheat, teff ranks
first in total production and total cultivated cropland in Ethiopia (Hailu et al., 2015). Some
scholars, such as Shita et al. (2020) argue that the low productivity of teff may reflect the low
research and development investment in teff seed improvement and a short history of teff genotype
improvements.
1.2 Background of community-based seed producer cooperatives
As of 2015, there were about 72,249 primary cooperatives in Ethiopia with 12.3 billion Birr capi-
tal and with more than 13.34 million members, of which 9.73 million are males and 3.61 million
females. About 31% of these primary cooperatives are engaged in agriculture. Moreover, there
are about 353 cooperative unions out of which 57% are agriculture-related (FCA, 2015). During
the five years of the first Growth and Transformation Plan (GTP-I), cooperatives supplied about
24,383,801 quintals of fertilizer, 1,731,571 quintals of improved seeds, and 766,416 liters of chemi-
cals to the farming community, covering about 95% of national total supply of agricultural inputs
(FCA, 2015).
Farmers’ ability to improve farm productivity is constrained by limited access to better tech-
nologies and information about best management practices (CSA, 2012a). In this regard, access
to inputs, such as fertilizer, improved seed, pesticides and better farming practices are crucial to
increase agricultural production. Fetien et al. (2016) highlight that seed is one of the fundamental
agricultural inputs and the application of superior varieties and quality seed can increase yield
by 40%. In this regard, the government is trying to transform agriculture from the traditional to
a modern way through its agriculture-led economic policy. Improved agricultural technologies
have been promoted to increase agricultural production and productivity, supply of quality seed
being one among others. However, access and use of these technologies by the smallholder farm-
ers is very low, associated mainly with the delivery system. At present, neither the public nor the
private sector is able to provide poor farmers with a choice of seed varieties for most crops (Fetien
et al., 2016).
The seed sector in Ethiopia consists of three seed systems: formal, informal, and intermediary
seed systems (Sisay et al., 2017). Each seed system has a specific contribution to the delivery of seed
to farmers, but they vary in their approach and respective strategies. The formal seed system (led
by public seed enterprises and the private seed commercial sector) can be characterized by a clear
chain of activities. It usually starts with plant breeding and promotes materials for formal variety
release and maintenance. Regulations exist in this system to maintain variety identity and purity
as well as to guarantee physical, physiological and sanitary quality. Seed marketing takes place
through officially recognized seed outlets and by way of national agricultural research systems
and even through relief seed programs (Louwaars & De Boef, 2012). Formal systems are especially
important when seed is used to grow crops for commercial purposes (for example export or further
food processing) and the uniformity and quality of the product must be guaranteed. However, the
potential size of the certified seed market in the Ethiopia ranges from 0.75 to 1.0 million quintals
per year, while the current size of the penetrated market is about 0.2 million quintals per year. This
clearly shows that the formal seed sector cannot ensure farmers easy access to seeds of improved
varieties (Workineh et al., 2014).
The informal seed system is basically what the formal system is not. As per Bishaw and van
Gastel (2008), the informal seed system is known by different names, such as farmer-managed
seed systems, informal seed systems, traditional systems, local seed systems, and farmers’ seed
systems. This system is flexible, resilient, and easily adaptable to changing local conditions. In
the informal seed system, seed-related activities tend to be integrated and locally organized, and
farmers can themselves produce, disseminate and procure seed: directly from their own harvest,
through barter among friends, neighbors and relatives, and through local grain markets or traders.
Perhaps because of its local specificity to needs and preferences, the informal system provides
most of the seed farmers use (Workineh et al., 2014).
A flexible alternative strategy for the development of the informal seed sector can be used
to cater to the needs of these farmers, who comprise a large proportion of the dryland farming
population (MoFED, 2012). To solve the problem of access to seeds, an Integrated Seed Sector
Development (ISSD) program was introduced in 2009. The program focused on organizing and
capacitating seed producer cooperatives (SPCs) at the local level. One of the targets of the ISSD
program is to improve smallholder farmers’ access to and use of quality seed of new, improved,
and/or farmer-preferred varieties to sustainably increase agricultural productivity through orga-
nizing and supporting SPCs in its LSB (Local Seed Business) project and thereby contribute to
ensuring food security in the country (ISSD, 2014). Community-based SPCs have been popular
in recent years for seed production and marketing. The role of SPCs in the Ethiopian seed sec-
tor has received considerable attention by the government and it is considered as one of the core
strategies for agricultural development (StataCorp, 2015, MoA, 2015). Since the launching of the
program in 2009, about 60 farmer groups were established in Tigray with a total membership of
2773 farmers: 2220 males and 553 females. All of them are legally recognized as SPCs and have
business plans for the development of sustainable and autonomous quality seed production and
marketing (Fetien et al., 2016).
The SPCs get support from Bureau of Agriculture and Rural Development, Tigray Agricultural
Research Institute, Mekelle University (MU) ISSD program, Adigrat University, and others. The
support includes provision of foundation seeds, capacity building, quality control, advisory ser-
vice, and technical assistance at farm level. The SPCs take the foundation seed through their
unions and/or woreda agricultural input section and distribute it to their members for multipli-
cation. The SPCs then collect the seed their members produce and sell it to unions. The unions
check the quality of the multiplied seed and in turn sell it back to the SPCs, regional markets,
or to the woreda agricultural input section, later to be sold to nearby farmers who do not mul-
tiply improved seeds. Then, the SPCs distribute the union-checked seeds to their members for
further production. SPC members are not allowed to retain any improved teff seeds from what
they produce. Rather, they are obliged to only use teff seeds that are checked for quality by the
union.
2 METHODOLOGY
2.1 The study area
Tigray is one of the regions of Ethiopia where the residents are highly vulnerable to recurrent
drought and famine (BoARD, 2016). Agriculture is the main economic activity of most farmers in
the study area. Smallholder crop and livestock farming is the dominant mode of production in the
districts (BoARD, 2016). Tigray regional state is found in the Northern part of Ethiopia (Figure 1)
extending from 12◦ 15′ to 14◦ 50′N latitude and from 36◦ 27′ to 39◦ 59′E longitude. It covers 52,000
km2 , most of which is highland between 1500 and 3900 masl (BoFED, 2013). Rainfall distribution
in the region is characterized by high temporal and spatial variability, with annual precipita-
tion ranging from 450 to 980 mm (BoFED, 2013). The agriculture system is oriented towards
providing subsistence requirements for the farm household (BoARD, 2016). As per the CSA
(2013), the population of Tigray in 2017 was estimated to be 4,960,003, about 75.8% living in rural
areas.
FIGURE 1 Map of the study areas. [Colour figure can be viewed at wileyonlinelibrary.com]
2.2 Sample size and sampling techniques
The study employed multistage sampling procedure, with both purposive and probability sam-
pling methods. Purposive sampling was used to select the teff producing districts in Tigray, and
the seven community-based teff SPCs. Next, a systematic random sampling method was used to
select respondents. Of the total 10,500 households living in the seven Kebeles, 80% (about 8,400
households) are assumed to be involved directly in agriculture. Following Cochran (1977) mathe-
matical formula which yields a representative sample, 386 households were selected as sample as
follows:
( 𝑡 )2
𝑛= 𝑝 (1 − 𝑝)
𝑑
where n = sample size; t = values of standard variant (degree of variability in the attributes being
measured) at 95% confidence interval (t = 1.96); p = the estimated proportion of an attribute
that is present in the population; d = acceptable margin of error for the proportion being esti-
mated = 0.05. To avoid errors during data collection, about 400 (200 from the 277 members of
community-based teff SPCs proportionate to their membership and 200 nonmembers as control
group proportionate to the number of teff producers) were chosen proportionately to the pop-
ulation using simple random sampling for each Kebele. In the seven Kebeles, about 277 farmers
(253 male-headed households and 24 female-headed households) were organized in the form of
community-based teff SPCs, which were the focus of this study. Moreover, teff producer farmers
who reside in the seven Kebeles but not members of community-based teff SPCs were selected as
a control group. A sampling frame of all teff producers for each Kebele (both members and non-
members of community-based teff SPCs) was obtained from ISSD project, Agriculture and Rural
Development Offices at district level, and from Kebele administration.
2.3 Data collection instruments and procedures
The survey was conducted between October and December 2019, just a year before the Tigray war
broke out. A structured questionnaire was used to collect quantitative data on the use of improved
teff seed and teff production. The instruments used were:
1. Literature and document review: data on trends of teff production, cooperative-related specific
policies and strategies; the statistics of overall agricultural cooperatives, and access to improved
teff seed. A total of 84 documents were retrieved for screening (61 published and 23 gray lit-
erature. About 51 documents (24 academic journal articles, 5 working papers, 5 strategy and
plan documents, 6 statistical documents, 3 project reports, 2 books, 3 research papers, and 3
unpublished articles) were used for triangulation of our findings;
2. Household survey: A survey of 400 households (200 members of SPCs and 200 nonmem-
bers) were undertaken focusing on household and farm characteristics, asset holdings, use
of improved teff seed, production of teff and livelihood status.
The completed questionnaires were examined and those with incomplete responses or missing
values were discarded. Fourteen questionnaires were found to be incomplete and void, and thus
rejected. Finally, a total of 386 respondents (193 members and 193 nonmembers) were used for
the analysis. The survey was conducted with the help of five trained enumerators. Respondents
were informed (informed consent) that they have the right to privacy, anonymity, confidentiality,
voluntary participation, and the right to withdraw to ensure the ethical standards.
2.4 Model specification
Because of potential self-selection problems, the empirical challenge in impact assessment using
observational studies is establishing a suitable counterfactual against which the impact can be
measured. To accurately measure the impact of membership on productivity, farmers should be
randomly assigned to a cooperative so that the effect of observable and unobservable character-
istics between members and nonmembers is the same, and the effect is attributable entirely to
membership. However, when membership is not randomly assigned, the decision to join a coop-
erative is likely to be influenced both by unobservable (e.g., managerial skills, motivation, and
land quality) and observable heterogeneity that may be correlated to the outcome of interest.
In non-experimental research with survey data, propensity score matching (PSM) method has
been widely applied to address the issue of selection bias. However, the PSM method estimates
the effects of a treatment accounting only for observed heterogeneities. In order to address the
issue of selection bias from both observed and unobserved heterogeneities, several studies have
applied a treatment effects model (e.g., Gezahegn et al., 2018). In this study, we employ the treat-
ment effects model (TEM), which accounts for the deviation from the conditional independence
assumption (CIA) imposed by the PSM approach. It is a linear model that allows for a specific cor-
relation structure between the unobservables that affect the treatment and the unobservables that
affect the potential outcomes. Thus, in addition to the average treatment effect (ATE), the param-
eters estimated by the TEM can be used to estimate the average treatment effect on the treated
(ATT) when the outcome is not conditionally independent of the treatment, i.e., when the CIA
is violated (StataCorp, 2015). The TEM deals with two interrelated equations: outcome equation
and selection equation. The outcome equation of land productivity that accounts for cooperative
membership is given as:
yi = 𝑥𝑖′ 𝛽1 + 𝛽2 di + 𝜀i (1)
where yi is farm output per hectare (land productivity); xi is a vector of exogenous farm inputs
(land, labor, and capital), household head and household characteristics (gender, age, education,
family size, and number of dependents), farm characteristics (land fragmentation), and woreda
characteristics (captured by a woreda dummy); di is a dummy for membership in teff SPCs (di
= 1 for members; di = 0 for nonmembers); βi are parameters to be estimated; ϵi is error term; i
indexes farm households. We specify an augmented Cobb–Douglas production function (Zwick,
2002; Black & Lynch, 2001) with productivity, land, labor, and capital log-transformed. Land
fragmentation f is measured as the sum of squared plot areas ai divided by the square of their
∑ ∑ 2
sum (f = a2i ∕[ ai ] ), which falls in the range [0, 1]. The effect of SPC membership on pro-
ductivity may vary with the age of a household head as a result of interest, commitment, and
competence differentials between relatively old and young farmers in exploiting the benefits of
membership. That is, SPC membership and age are unlikely to have additive effects on produc-
tivity. In order to capture this potential non-linear effect, we include an interaction term of these
two variables in the model.
Since selection into a cooperative is a voluntary action made by a farmer, the membership
variable di is potentially endogenous (Narayanan, 2014). Thus, the question is: Does β2 from an
OLS regression measure the impact of membership on land productivity? If the typical individual
who chooses to be a member of a cooperative would have relatively better productivity whether
he/she is a member, the answer would be no! Following Greene (2002), we model the likelihood
of membership (selection equation) as:
{ ∗
1 if di > 0
d∗i = wi′ 𝛼 + ei di = ∗ (2)
0 if di ≤ 0
d∗i can be perceived as a farmer’s desire to be a member of an SPC and is explained by individ-
ual characteristics (gender and age) and location (distance to improved seed distribution centers)
contained in the vector wi . Thus, a farmer would join a cooperative if his/her desire is greater than
a certain threshold, which is usually 0 (that is, d∗i > 0). We assume that yi (land productivity) and
d∗i (desire to be a member) have a bivariate normal distribution, and ϵi and ei are correlated. Cou-
pled with Equation (1), Equations (3) and (4) give the expected values of land productivity when
di = 1 (farmers i is a member) and di = 0 (farmers i is a nonmember), respectively:
( )
E(yi |di = 1) = xi′ 𝛽1 + 𝛽2 + E (𝜀𝑖 |di = 1) = xi′ 𝛽1 + 𝛽2 + E 𝜀i |wi′ 𝛼 +(ei > )0
𝜙 −wi′ 𝛼 (3)
= xi′ 𝛽1 + 𝛽2 + 𝜌𝜎𝜀 ( )
1−Φ −w ′i 𝛼
( )
( ) −𝜙 wi′ 𝛼
E(yi | di = 0) = xi′ 𝛽1 + E (𝜀i |di = 0) = xi′ 𝛽1 +E 𝜀i |wi′ 𝛼 + ei ≤ 0 = xi 𝛽1 + 𝜌𝜎𝜀
′
( ) (4)
1 − Φ wi′ 𝛼
where ρ is the correlation between ϵi and ei ; ϕ and Φ are the probability density and cumulative
distribution functions of wi′ 𝛼, respectively. These two error terms will be correlated if ei con-
tains variables that affect both yi and d∗i . Thus, the difference in expected values ATE of land
productivity between members and nonmembers – that is, the average treatment effect (ATE) –
is given as follows:
𝜙
ATE = E(yi |di = 1) − E(yi |di = 0) = 𝛽2 + 𝜌𝜎𝜀 (5)
Φ [1 − Φ]
If the selectivity correction value, ϕ/(Φ[1 − Φ]), known as inverse Mills ratio (identified through
its nonlinear relationship to xi ) is omitted from the least squares regression (OLS), ATE is what
will be estimated by the OLS coefficient of di in Equation (1). Since, by assumption, all terms in
ρσε ϕ/(Φ[1 − Φ]), are positive, i.e., ϵi and ei are assumed to have a positive correlation, OLS over-
estimates the membership effect. Thus, the treatment effects model will disentangle the effect of
membership from the effect of factors that affect both membership and productivity. An important
consideration here is the variables to be included in the outcome Equation (1) and selection Equa-
tion (2). The covariates in the selection function should contain one or more variables related to
the probability of treatment selection, but excluded from outcome prediction (e.g. LaLonde, 1986).
In other illustrations, only covariates excluded from outcome prediction have been included in the
selection function (e.g. StataCorp, 2001). In either case, Briggs (2004) notes, it is typically assumed
that the additional variables included in the selection function are strong predictors of treatment
assignment (cooperative membership, in this case), yet uncorrelated with the outcome of interest
(productivity, in this case).
3 RESULTS
3.1 Descriptive statistics
Table 1 reports the descriptive statistics of variables. The average value of land productivity for the
whole sample stands at 11.86 quintals per ha, with a rather large variance (it ranges from 4 to 32
quintals/ha). The average farmer tends to own a very small area of land with a mean of slightly less
than 0.5 ha. There is also a considerable variation among farmers in this respect: land ownership
ranges from 0.065 ha to 2 ha. The description applies also to labor. The average household has
about five active family members, the smallest and the largest having 1 and 11, respectively. On
average, households appear to own 1.5 oxen, with 1 and 5 being the smallest and the largest number
of oxen owned.
Table 2 presents the mean values of variables used in the analysis and their unconditional differ-
ences between SPC members and nonmembers. Results show statistically significant differences
regarding labor and capital between members and nonmembers. Conversely, no statistically sig-
nificant difference is found concerning land and land productivity between SPC members and
nonmembers. However, since these results are only descriptive, they cannot be used to draw
causal inferences. Potential confounding variables—such as demographic and land characteris-
tics, and location—need to be taken into account econometrically in order to obtain more reliable
results.
3.2 Econometric results
Table 3 presents the results of the treatment effects model. The Wald test reported in the
table footnote indicates that we can reject the null hypothesis of no correlation between the
TA B L E 1 Descriptive statistics of variables.

Variable name Description (Unit) Mean (SD) Min (Max)
Productivity Teff output per area of land (quintal/ha) 11.860 (3.646) 4 (32)
Land Area of land used in teff production 0.489 (0.312) 0.065 (2)
(hectare = ha)
Labor Amount of labor used in teff production 4.386 (2.322) 1 (11)
(number)
Capital Number of oxen owned by a household 1.500 (0.978) 1 (5)
(number)
Age Age of the household head (years) 46.422 (14.247) 19 (87)
Marital status Marital status of the household head (1 = 0.959 (0.200) 0 (1)
Married; 0 otherwise)
Education Years of formal schooling of the 5.979 (5.125) 0 (18)
household head (years)
Dependency ratio The ratio of number of dependents (<15 + 0.257 (0.291) 0 (1)
>64 years old) to total household size
(ratio)
Fragmentation Degree of land fragmentation of a 0.614 (0.282) 0.250 (1)
household (dimensionless)
Other land Area of land used for producing crops 0.398 (0.359) 0 (2.75)
other than teff (ha)
Total land Total area of land owned by a household 0.887 (0.559) 0.063 (3.75)
(ha)
Distance Distance of a household to an SDC* (km) 2.405 (2.248) 0.100 (10)
SPC membership Membership status of the hh head in an 0.500 (0.501) 0 (1)
SPC* (Yes = 1)
Woreda (district)
Laelay Maichew Whether a household was sampled from 0.482 (0.500) 0 (1)
this woreda (Yes = 1)
Tahtay Maichew Whether a household was sampled from 0.264 (0.442) 0 (1)
Tahtay Koraro Whether a household was sampled from 0.150 (0.358) 0 (1)
Asgede Tsimbla Whether a household was sampled from 0.104 (0.305) 0 (1)
*SPC = Seed producers cooperative; SDC = Seed distribution center. Source: Field survey (2019).
treatment-assignment errors and the outcome errors. The estimated correlation between the
treatment-assignment errors and the outcome errors ρ is −0.766. The negative relationship indi-
cates that unobservables that increase observed productivity tend to occur with unobservables
that lower the likelihood of cooperative membership. For the outcome model, it is shown that
farm size (p < 0.01) and capital (p < 0.05) have statistically significant positive and negative effect
on productivity, respectively. While higher capital tends to boost productivity, higher farm size
turns out to reduce productivity. We also find a negative effect of a household’s dependency ratio
on productivity. Labor, on the other hand, has no significant effect at all. Similarly, we find no
effect of education and marital status on productivity.
TA B L E 2 Two-sample t-test with equal variances: SPC members vs. nonmembers.

SPC membership
Variables Members Nonmembers Difference
Productivity 11.845 11.874 −0.029
Land 0.511 0.468 0.043
Labor 4.653 4.119 0.534**
Capital 1.632 1.368 0.264***
Age 45.264 47.580 −2.316
Marital status 0.964 0.953 0.011
Education 5.984 5.974 0.010
Dependency ratio 0.252 0.262 −0.010
Land fragmentation 0.601 0.628 −0.027
Other land 0.409 0.386 0.023
Total land 0.920 0.854 0.066
Distance 2.278 2.532 −0.254
Results show an inverted U-shaped relationship between the age of a household head and pro-
ductivity. Among the other variables, area of land used for crops other than teff is found to have
a statistically significant (p < 0.1) positive effect on productivity. With regards to districts, Tahtay
Koraro turns out to have a lower teff productivity (p < 0.01) compared to Laelay Maichew, the refer-
ence district. But no productivity difference was found among Laelay Maichew, Tahtay Maichew,
and Asgede Tsimbla districts. Finally, we find a statistically significant (p < 0.01) positive effect of
SPC membership on productivity. We also find a negative effect of the interaction term between
SPC membership and age of the household head (p<0.05). In the selection equation, only age has
a statistically significant effect (p < 0.01) on the likelihood of SPC membership, with a U-shaped
relationship. This relationship implies that a person’s willingness to join a cooperative first dimin-
ishes until a certain age level is reached, beyond which age and selection into a cooperative will
have a positive correlation.
Table 4 presents the estimated average treatment effect (ATE) and average treatment effect on
the treated (ATT). The estimated ATE of being an SPC member is 0.341 and the ATT is 0.345,
both statistically significant, as indicated by their respective 95% confidence intervals which do
not include zero. These two values are slightly different, because the treatment indicator variable
(SPC membership) has been interacted with the age of the household head in the model to capture
any potential variation of the effect of SPC membership with age, as outlined in the methodology
part of the paper. However, the ATE and ATT are very close to each other, indicating that the aver-
age predicted outcome for SPC members is similar to the average predicted outcome for the whole
population. Some contradiction is apparent from a comparison of the unconditional (Table 2)
and conditional (Table 4) results. While the unconditional (with no other variables controlled
for) results show no statistically significant difference in the productivity of SPC members and
nonmembers, the treatment effects results (ATE and ATT) show that members are more produc-
tive, very slightly though. When we control for observable production inputs, socio-demographic
variables, and location indicators parametrically, a positive effect of SPC membership on
productivity emerges, implying how a naive descriptive comparison can lead to poor conclusions.
Following a key insight from Alipourfard et al. (2018), we can plausibly ascribe the apparent
contradiction to Simpson’s paradox, which states that an association observed in aggregated data
TA B L E 3 Results of treatment-effects model with endogenous treatment.

Regressors Coefficient Robust SE t-value p-value
Outcome model: dependent variable = Ln (Productivity)
Ln (Land) −0.165*** 0.040 −4.10 0.000
Ln (Labor) −0.031 0.045 −0.69 0.488
Ln (Capital) 0.082** 0.036 2.28 0.023
Age 0.028*** 0.009 3.00 0.003
Age squared −0.244*** 0.089 −2.75 0.006
Marital status (Married = 1) 0.014 0.110 0.13 0.895
Education 0.003 0.004 0.85 0.396
Dependency ratio −0.173* 0.099 −1.75 0.080
Land fragmentation −0.042 0.066 −0.63 0.530
Other land 0.072* 0.039 1.82 0.068
SPC membership 0.511*** 0.122 4.19 0.000
SPC membership × Age −0.004** 0.002 −2.06 0.040
Woreda (reference = Laelay Maichew)
Tahtay Maichew −0.052 0.046 −1.13 0.260
Tahtay Koraro −0.203*** 0.059 −3.43 0.001
Asgede Tsimbla −0.035 0.053 −0.67 0.503
Constant 1.562*** 0.311 5.03 0.000
Selection model: dependent variable = SPC membership
Marital status (Married = 1) −0.193 0.408 −0.47 0.637
Age −0.140*** 0.034 −4.16 0.000
Age squared 1.352*** 0.332 4.07 0.000
Total land owned 0.002 0.129 0.01 0.990
Distance to SDC 0.019 0.028 0.66 0.507
Constant 3.566*** 0.897 3.98 0.000
95% Confidence interval
Rho −0.766 0.110 −0.910 −0.454
Sigma 0.287 0.030 0.235 0.351
Lambda ( = Rho × Sigma) −0.220 0.052 −0.322 −0.118
Wald test of independent equations (rho = 0): chi2(1) = 14.49; Prob. > chi2 = 0.0001.
***p < 0.01,
**p < 0.05,
*p < 0.1.
may be quite different from—and even opposite to—that observed in underlying subgroups. In the
context of the present study, the paradox may arise if: (1) SPC membership is correlated with one or
more of the control variables (other regressors) in the model; or (2) the value of productivity differs
within subgroups of the control variables. These two conditions are highly likely in this particular
study. For example, in the sample data, SPC membership is significantly correlated with labor
(p < 0.05) and capital (p < 0.05), which are both controlled for in the model. More formally, if
P = a farmer’s productivity, M = SPC membership status, and X = a vector of control variables,
Simpson’s paradox arises whenever dE(P│M)/dM ≤ 0 and dE(P│M, X)/dM > 0, or vice versa,
TA B L E 4 Predicted value of treatment effects: ATE and ATT.

Treatment effect Value SE 95% Confidence interval
ATE 0.341 0.082 0.180 0.502
ATT 0.345 0.083 0.183 0.507
where d and E denote first derivative and expected value, respectively (Alipourfard et al., 2018).
That is, a negative or zero unconditional marginal effect of membership status M on productivity
P may turn out to be positive if a control variable(s) X is included in the model. This is exactly
what our unconditional and conditional results show, except that the unconditional effect was
zero rather than negative.
4 DISCUSSION
The positive effect of capital on productivity is consistent with expectation, which might be
the result of a potential capital (oxen) scarcity relative to land and/or labor in the study area.
Similarly, the negative correlation of plot size with productivity is consistent with the negative
size-productivity relationships established by numerous studies (e.g., Desiere & Jolliffe, 2017;
Carletto et al., 2013). This negative effect could be explained based on technical efficiency. As
land cultivated increases, the technical efficiency (and thus the productivity) of a farm tends to
diminish, partly due to suboptimal management practices not suited for larger scale production.
Moreover, this inverse relationship may be explained by a parallel inverse relationship between
the farm size a farmer owns, and the proportion of that farm actually put to a productive use. That
is, a farmer’s tendency to underutilize available land is likely to increase with farm size, leading
to lower land productivity (Ellis, 1993).
The inverted U-shaped relationship between the age of a household head and productivity is
also consistent with normal expectations. A person’s productivity is expected to increase up to a
certain level of age beyond which productivity decreases. Up to that certain level of age, produc-
tivity is expected to increase with gains in experience. Beyond that point, however, the downsides
of old age vis-à-vis productivity on the farm might dominate the benefits of experience. Age and
productivity will not go together indefinitely. The positive effect on productivity of farm size used
for crops other than teff may be the result of a tradeoff between intensive vs. extensive teff pro-
duction. That is, if a farmer allocates more land for the production of other crops, he/she would
likely cultivate the land left for teff more intensively (e.g., with more fertilizer and other modern
inputs) to meet household demand for teff from a higher productivity rather than from a larger
farm size. This explanation is plausible as fertilizer and other modern inputs are not controlled
for in the model, and that most farmers in the study area are not able to use the optimal level of
these inputs for reasons of rampant supply and demand imbalance.
The ATE value of 0.341 implies an average difference of 1.406 quintals per hectare (note
that productivity is log-transformed in the econometric analysis) in the potential productivity
between SPC member farmers and other farmers who did not join any SPC. On the other hand,
the ATT value of 0.345 (1.412 quintals per hectare) compares the productivity of farmers who
are SPC members with the counterfactual productivity of the same farmers had they not been
members of an SPC. Given that the average productivity in the sample is 11.86, and that yield
varies from 4 to 32 quintals per hectare, the estimated ATE of 1.406 seems rather small. However,
this is likely the result of the fact that access to improved teff seed is not limited to SPC members
only. For example, a descriptive comparison of utilization in the sample reveals that about 97%
of SPC members and about 78% of nonmembers are regular users of improved teff seed. Since
SPC members cannot use all the improved teff seeds they produce, it is economically suboptimal
to restrict the use of improved teff seeds to members only, making it econometrically impossible
to control for the spillover effects as well. Therefore, given the fact that both SPC members and
nonmembers use improved teff seeds, the rather small value of the ATE should by no means be
taken to count against cooperative formation and/or membership.
The higher productivity of members is likely the result of more timely and secure access to
improved teff seed, relative to nonmembers. SPC members may also get better information on
the benefit and availability of other farm technologies and practices, such as fertilizer, pesticides,
and soil and moisture conservation compared with their nonmember counterparts. The positive
effect may also be attributed to other pathways. For example, the cluster-based organization of the
SPCs (highlighted in Section 1.2) may boost farmers’ access to market, market information, tech-
nical and financial support, and beneficial social connections (social capital), each of which has
a potential for improving productivity via price and/or institutional incentives. These potential
benefits of cluster farming (under SPCs) may also have positive spillover effects on the productiv-
ity of other, non-SPC-affiliated plots used for teff crop production, leading to the estimated overall
higher teff productivity of members. Cluster farming may also improve productivity via a better
bargaining power of the farmers as it helps them consolidate their produce and deliver in bulk,
thereby saving on transportation and other transaction costs (Montiflor et al., 2008). SPC mem-
bership may also help farmers in dealing with the risk inherent in agriculture (Gezahegn, 2020,
Ortmann & King, 2007), boosting the adoption of productivity-augmenting farm technologies.
Generally, the positive effect of SPC membership on productivity is consistent with numerous
prior studies that find a positive effect of cooperative membership on productivity and technical
efficiency (e.g., Abate et al., 2014) and technology adoption (e.g., Shiferaw et al., 2009, Fischer &
Qaim, 2012, Abebaw & Haile, 2013). It is also consistent with the findings of Sisay et al. (2023) that
SPCs have a great contribution to enhancing farmers’ productivity as they tend to satisfy the seed
demand of farmers by supplying quality seeds based on farmers’ interests better than public and
private seed producers do (Sisay et al., 2017).
On the other hand, the negative effect of the interaction term between SPC membership and
age of the household head implies that the benefits of membership in terms of farm productivity
are lower for older farmers. That is, the positive productivity-effect of SPC membership decreases
with the age of the household head, probably because of a lower interest and/or competence of
older farmers to exploit all the productivity-boosting potentials of SPC membership.
5 CONCLUSION
This study analyzes the effect of farmers’ membership in seed producer cooperatives on their
teff productivity in Tigray, North Ethiopia. To this end, cross-sectional data from 193 members
and 193 nonmembers were analyzed using a treatment effects model (TEM), which accounts for
both observed and unobserved sources of selection bias. Results show that, on average, members
produce 1.406 more quintals per hectare compared with their nonmember counterparts. Timely
access to improved teff seed, better information on the benefit and availability of complementary
farm technologies and practices may be among the factors that explain the superior performance
of members. We also conclude that membership in seed producer cooperatives is more beneficial
to younger farmers in terms of farm productivity. However, although this study sheds some light
on the impact of SPCs on productivity, it may be far from being conclusive. Thus, given that our
study relies on a cross-sectional data from a relatively small sample of farm-households, further
research is needed in Tigray and/or other regions of Ethiopia to ascertain the effectiveness of SPCs
in enhancing farm productivity.
ORCID
Nahusenay Teamer Gebrehiwot https://orcid.org/0000-0002-0497-7180
Tafesse W. Gezahegn https://orcid.org/0000-0001-5052-8442
Kifle Tesfamariam Sebhatu https://orcid.org/0000-0001-9428-1752
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G., Beyene, A. T., Tesfay, A. H., & Sebhatu, K. T. (2024). Does membership in seed
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https://doi.org/10.1111/apce.12466

Does Membership in Seed Producer Cooperatives Improve Smallholders Teff

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Received: 28 March 2023 Revised: 4 December 2023 Accepted: 23 December 2023

Does membership in seed producer cooperatives

Nahusenay Teamer Gebrehiwot1 Tafesse W. Gezahegn1

1 College of Business and Economics,

Mekelle University, Mekelle, Tigray, Abstract

© 2024 Edgard Milhaud Foundation.

Ann Public Coop Econ. 2024;1–17. wileyonlinelibrary.com/journal/apce 1

affect the potential outcomes. Results show that, on

1.1 Trends of teff production and productivity in Ethiopia

1.2 Background of community-based seed producer cooperatives

2.1 The study area

2.2 Sample size and sampling techniques

2.3 Data collection instruments and procedures

2.4 Model specification

3.1 Descriptive statistics

3.2 Econometric results

TA B L E 1 Descriptive statistics of variables.

TA B L E 2 Two-sample t-test with equal variances: SPC members vs. nonmembers.

TA B L E 3 Results of treatment-effects model with endogenous treatment.

TA B L E 4 Predicted value of treatment effects: ATE and ATT.

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