CHAPTER ONE

INTRODUCTION

1.1 Background to the study

Agricultural cooperatives are a network of farmers who reap many benefits of doing business as a unit. Agricultural cooperatives have a long history dating back to the 18th century, with the first recorded cooperative formed in Rockdale, England, in 1844 (Blanc et al., 2020). Since then, they have grown in number and importance, particularly in the developing world. According to the International Cooperative Alliance (ICA), there are over 3 million agricultural cooperatives worldwide, representing over 1 billion members (ICA, 2021). These cooperatives are involved in various activities, including production, processing, marketing, and input supply.

The main aim of these cooperatives is that they enable smallholder farmers to achieve economies of scale, which can help reduce production costs and increase efficiency (Feder et al., 1985). This can result in higher incomes for farmers, particularly if they are able to sell their products at higher prices due to increased bargaining power (World Bank, 2015).

These Cooperative also goes a long way in providing access to credit and other support services, particularly in areas where formal financial institutions are scarce. For example, a study by Fletschner and Kenney (2014) found that women who were members of agricultural cooperatives in Ethiopia had better access to credit than non-members. Similarly, a study by Klasen and Schüler (2011) found that agricultural cooperatives in Tanzania were able to provide access to agricultural inputs, extension services, and marketing support to their members, which resulted in higher crop yields and incomes.

Cooperatives are often formed by farmers who share common interests and goals, and as such, they can serve as a means of bringing people together and building social networks (Putnam, 2000). This can lead to increased trust and cooperation among farmers, which can facilitate the sharing of knowledge and resources, as well as the development of new initiatives and projects.

However, agricultural cooperatives also faced several challenges that limit their impact on farmers’ livelihoods. One of the main challenges is the lack of management and technical skills among cooperative members, which can affect the efficiency and effectiveness of the cooperative (Ouma et al., 2014). Additionally, cooperatives often require significant start-up capital, which can be a barrier for smallholder farmers who may not have access to finance. Finally, cooperatives can be vulnerable to political interference and corruption, particularly in areas where governance is weak (Food and Agriculture Organization, 2013).

 Looking in the African scale, Africa has a large agricultural sector, with over 60% of the population engaged in farming (World Bank, 2021). However, the sector faces several challenges, including low productivity, limited access to markets, and lack of infrastructure and support services. Agricultural cooperatives have been formed in various parts of the continent as a means of addressing some of these challenges, particularly for smallholder farmers who may not have access to formal markets and financial institutions.

Cooperatives in Africa are their ability to provide access to markets and improve farmers’ bargaining power. For example, a study by Van Dijk et al. (2013) found that smallholder farmers in Uganda who were members of a coffee cooperative were able to sell their coffee at a higher price compared to non-members, resulting in higher incomes. Similarly, a study by Mekonnen and Gerber (2017) found that vegetable farmers in Ethiopia who were members of a cooperative were able to access high-value markets, resulting in higher prices and incomes.

Agricultural cooperatives in Africa also played an important role in providing access to credit and other support services. For example, a study by Ma and Abdulai (2016) found that agricultural cooperatives in Ghana were able to provide access to credit to their members, resulting in higher crop yields and incomes. Similarly, a study by Wambugu and Kihiu (2015) found that dairy cooperatives in Kenya were able to provide access to veterinary services and artificial insemination, resulting in higher milk production and incomes for members.

However, agricultural cooperatives in Africa also face several challenges that can limit their impact on farmers’ livelihoods. One of the main challenges is the lack of capacity and technical skills among cooperative members and leaders, which can affect the efficiency and effectiveness of the cooperative (Kariuki et al., 2018). Additionally, cooperatives often face challenges in accessing finance and capital, which can limit their ability to provide services to their members. Finally, cooperatives can also be vulnerable to political interference and corruption, particularly in areas where governance is weak (Food and Agriculture Organization, 2013)

Agricultural cooperatives have the potential to improve the livelihoods of smallholder farmers by providing access to markets, credit, and other support services. Overall, agricultural cooperatives have been shown to be an effective means of promoting smallholder farmers’ welfare, particularly in low-income countries where farming is an important source of livelihood. However, more research is needed to better understand the impact of agricultural cooperatives on farmers’ livelihoods, particularly in different contexts and regions like in bamenda.

1.2 statement of the problem

Smallholder farmers in low-income countries often face numerous challenges that limit their ability to improve their livelihoods through agriculture. These challenges include limited access to markets, credit, and other support services, as well as weak bargaining power and low levels of social capital. Agricultural cooperatives have been identified as a potential solution to these challenges, but there is a need for more research to better understand the impact of cooperatives on smallholder farmers’ livelihoods, as well as the challenges and strategies for improving the effectiveness of cooperatives. Therefore, the main problem addressed by this study is the need to better understand the impact of agricultural cooperatives on the livelihoods of smallholder farmers in low-income countries and identify strategies for improving the effectiveness of cooperatives in addressing the challenges faced by smallholder farmers. Agriculture is a vital sector of the economy in Cameroon, accounting for more than 20% of the country’s Gross Domestic Product (GDP) and employing over half of the country’s population. Despite its importance, the sector has been facing several challenges that hinder its growth and development, including limited access to credit, poor infrastructure, low productivity, and inadequate market linkages. In response to these challenges, agricultural cooperatives have emerged as a popular organizational form for farmers to improve their livelihoods through collective action. However, the impact of these cooperatives on the livelihoods of farmers in Bamenda, Cameroon, remains unclear. This research aims to investigate the impact of agricultural cooperatives on the livelihoods of farmers in Bamenda, Cameroon.

1.3 Research questions

1.3.1 Main research question

What are the Impacts of agricultural cooperatives on the livelihood of farmers in Bamenda I,II and III?

1.3.2 Specific research questions.

How Financial Support does provided by agricultural cooperatives impact the income of farmers in Bamenda town?

To what extend does advice services from agricultural cooperative impact the life of farmers in Bamenda?

How material support does provided by agricultural cooperative impact the livelihood of farmers in Bamenda?

1.4 Research objective.

1.4.1 Main research objective.

To access the impact of agricultural cooperatives on the livelihood of farmers.

Specific research objective

To examine the Impacts of financial support services by agricultural cooperatives on the livelihood of farmers

To assess the impact of material support provided by agricultural cooperative on the livelihood of farmers.

To determine the impact of cooperative advice services on the livelihood of farmers