Cooperatives in Modern Food Supply Chains: A Case Study of the Malt Barley Sector in Ethiopia

Increases in food demand, product differentiation, and agribusiness growth provide new market opportunities for smallholders in Africa. Yet, smallholders face challenges of meeting quality, volume, and timing requirements to capture these opportunities. Cooperatives have been identified as a strategy to improve smallholder linkage to evolving food systems, by providing various supply chain services. However, empirical evidence is sparse on the performance of cooperatives in commercializing farm products and coordinating supply chain integration. In addition, a debate exists on which farmers are more likely to be member of a cooperative. In other words, do all smallholders have an equal chance of benefitting from the activities of cooperatives? Ethiopian malt barley cooperatives are used as an empirical case. Mixed methods were used to collect and analyze primary data. Our case study analysis shows that cooperatives provide diverse services, including contract brokerage, output marketing, input supply, and provision of technical assistance. Our empirical results also show that the members of these marketing cooperatives have larger landholdings, better farm resources, and better access to extension services compared to non-member farmers.