2013 – Measuring the Benefits of Smallholder Farmer Membership in Producer-Controlled Vertical Value Chains: Survey Findings From a Development Project in East Africa.

Author/Publication Information: David John O’Brien, Lloyd Banwart,  and Michael L. Cook. Poverty & Public Policy. A Global Journal of Social Security, Income, Aid, and Welfare. Vol. 5 No 4, December 2013, pp. 399-416

Why people decide to join, or not to join a cooperative? What are the benefits of membership as compared to non-membership-based organizations? This study reports on research involving members and non-members of four vertically coordinated dairy cooperatives, three in Kenya and one in Uganda. The study measures included both objective income gains and subjective satisfaction gains from cooperative membership. Findings determined that cooperative members have a small but statistically significant advantage over non-members in income from dairy. Other incentives for membership are based on selective incentives (i.e., provision of non-income services to members) and social capital (i.e., trust that the cooperative will purchase their milk and pay them a fair price).

The study suggests that for cooperative boards and management, academics as well as practitioners should pay greater attention to learning what motivates members of cooperatives, what incentives and enforced sanctions people respond and how, and how cultural norms impact their actions. This study provides valuable material to better understand motivations of cooperative members and their impact on effectiveness of their organizations to achieve success.