Performance of integrated and single cooperatives in bulk production and credit provision to smallholder farmers in Uganda

Abstract

Agricultural cooperatives are autonomous associations of individuals formed to augment production, marketing and financial needs of members. In Uganda, performance of cooperatives is largely constrained by weak organizational structures, market failures, and policy weaknesses. An integrated cooperative model (ICM) was introduced to improve performance of cooperatives but the effect of ICM on institutional performance has not been evaluated. This study examined the effect of cooperative integration on bulk production and credit provision to smallholder farmers. A multi-stage sampling technique was employed to select 40 cooperatives for the study. Primary qualitative and secondary quantitative data were collected from 16 focus group discussions and cooperatives’ performance reports respectively. Data was analyzed using thematic content analysis, t-test and censored tobit regression model to assess performance of the studied cooperatives. The results showed that integrated cooperatives bulk larger proportions of produce and disburse bigger loan proportions than single cooperatives. Tobit model revealed that integration has a positive significant (p< 0.05) influence on cooperatives’ performance in bulk production and providing credit. In conclusion, the results demonstrate that adoption of ICM improves performance of cooperatives and benefits to small holder farmers.  Keywords: Bulk production, credit provision, cooperatives, smallholder farmers