Abstract

This study assessed the effect of membership on income of members of farmers’ multipurpose cooperative societies in Anambra State. Specific objectives were to determine the effect of cooperative membership on members’ income, to determine if there is any difference in the farmers’ income before and after joining cooperative, and also to identify challenges faced by members of the agricultural cooperative in improving their income. Data used for the study were obtained using structured questionnaire administered to 324 respondents who were members of FMCS in the Anambra State. A multi-staged sampling technique was used to select the sample size and data was analyzed using mean rating, simple percentage, standard deviation and t-test. Findings revealed that the t-calculated value of 4.499 was significant at 0.000 significant level. Effects of cooperative membership were visible in that the credit needs of members were satisfied through agricultural cooperative; Processing of farm produce enhanced the income value of agricultural produce of their members. There was a significant difference in the members’ income before and after joining cooperative. The major challenges faced by members of the agricultural cooperative in improving their income as indicated by the respondents included shortage of skilled manpower, lack of cooperative education, financial problems, poor capitalization, and wrong notion of cooperatives. It was recommended that formation of cooperatives should be encouraged, especially among youths and educated people. Government should help out in the agricultural sector through the agricultural cooperative in order to encourage mechanized agricultural activities and makes farming attractive and lucrative.

1. Introduction

Agriculture has been described as the mainstay of the Nigerian economy in terms of food production, employment generation, sources of industrial raw materials, export product for foreign exchange earnings, contribution to Gross Domestic Product (GDP) and provider of income for the farmers ^{1, 2, 3}. This revered role of agriculture in the Nigerian economy has long been relegated to the background as a result of the discovery of oil in a large or rather commercial quantity in Nigeria. According to Toluwase and Apata ⁴, agriculture suffered serious neglect due to the oil boom in the 1970’s. Agricultural production, which then contributed about 80% to Gross Domestic Product (GDP), declined to less than 3% in the 1990’s and 2000’s. In order to redirect the situation, multiple of programmes were initiated which did not meet the objectives for which they were designed to achieve. This scenario was further constrained by the nation’s agricultural sector which was characterized by small farm holdings ⁵.

Cooperatives, more precisely agricultural cooperative, have been described as an effective instrument for improving the productivity, as well as the income of farmers ^{6, 7}. Various stakeholders, including the government and donor agencies have tried overtime to improve agricultural productivity on the platform of cooperatives. According to Uzoka ⁸, one method through which the government has been attempting to remedy the problem of low agricultural productivity has been through a campaign of encouragement and enlightenment for the smallholder farm owners to join or form cooperative societies.

Incidentally, the membership strength of most of the cooperative societies is relatively low. Cooperative as an organization is an effective mechanism and platform for mobilizing resources of disparate, small-scale farmers to enjoy the benefits of large-scale production. As averred by Oboh, Lawal, and Agada, ⁷, cooperative societies are voluntary associations of people who by pooling their physical, functional and human resources together, aim at improving their living standard. Farmers living in the rural areas can increase their income through increased agricultural productivity by forming themselves into cooperative groups. Agbo ⁹ identified specific benefits accruable to farmers if they are members of cooperative societies; get a strong bargaining power for loans and other services; a favourable atmosphere for a more effective government aid scheme; improved marketing opportunities for members; provision of services for members at highly reduced costs; mobilization of funds for farm business; improved dissemination of extension services through the group approach; self-reliance and motivation for members; increased access to improved skills, exchange of ideas and educational opportunities through adult education and literacy programmes; creation of avenues for members democracy and assumed collective responsibility.

The original impetus for the introduction of cooperative into Nigeria was in agriculture. Also, the modern rural cooperatives were formed in response to low prices for farm produce, high prices for farm inputs, wide marketing margins against the farmers, high transportation costs and farmers’ low bargaining power ^{6, 7}. It is perceived that most cooperative have failed to translate their group potential into increased agricultural production and income. As identified by Ijere in Oboh et al ⁷, most cooperatives fail because of poor membership strength, poor fund mobilization and poor leadership. It is believed that if the membership strength of cooperatives is improved, the members of the societies will have better access to various agricultural production and promotion facilities and consequently increase their income. Arguably, there has been inadequate research in this study area. This study, therefore, deem it necessary to fill this literature gap by investigating the effect of agricultural cooperative membership on income of members of farmers’ multipurpose cooperative societies in Anambra State, Nigeria. Specific objectives were to; determine the perceived effect of cooperative membership on members; determine if there is any significant difference in the farmers’ income before and after joining cooperative; and identify challenges faced by members of the agricultural cooperative in improving their income.

Ho₁: Membership of agricultural cooperative has no significant effect on income of members.

Ho₂: There is no significant difference in the members’ income before and after joining cooperative.

Ho₃: There are no significant challenges faced by members of the agricultural cooperative in improving their income.

2. Conceptual Review

International Co-operative Alliance according to Nwankwo ¹⁰ defined co-operative society as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise. He went further to state that co-operative society is an independent enterprise, promoted, owned and controlled by members to meet their needs. As an enterprise, co-operatives are active in markets locally, nationally and worldwide. Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. Co-operatives recognize their accountability to members, employees, customers, suppliers other co-operatives and the larger society. Many of these stakeholders also share ownership of the co-operative. Corporate responsibility is embedded in the principle of co-operative organization and operation and can inspire growing corporate sector efforts in this direction ¹⁰.

Membership of cooperative no doubt has helped cooperatives gain access to certain benefits that otherwise would have been difficult to obtain by the members if they were non-members. Previous researches have indicated that successful cooperatives, had been effective in satisfying economic and technical needs of member-producers land consolidation distribution of agricultural inputs and promoting agriculture related industry ^{11, 12, 13}. Agbo ⁹ identified specific benefits accruable to farmers if they are members of cooperative societies to include: strong bargaining power for loans and other services; a favourable atmosphere for a more effective government aid scheme; improved marketing opportunities for members; provision of services for members at highly reduced costs; mobilization of funds for farm business; improved dissemination of extension services through the group approach; self-reliance and motivation for members; increased access to improved skills, exchange of ideas and educational opportunities through adult education and literacy programmes; and creation of avenues for members democracy and assumed collective responsibility. According to United Nations ¹⁴, Cooperatives play a meaningful role in uplifting the socio-economic conditions of their members and local communities. Despite the much touted benefits associated with the cooperatives, some farmers are still reluctant to join. This raises a lot of questions, for example (i) why do some farmers join? (ii) Why do other farmers refuse to join? And (iii) are cooperatives really useful to their members?

Gasana ¹⁵, outlined some of the identified reasons why farmers join cooperatives to include: external support, cooperative performance, market access and collective bargaining, access to input services and credits, wealth creation risk sharing. It is arguable and discernible that the presence of the above listed conditions is critical to attracting farmers to becoming cooperative members.

The agricultural sector in Nigeria according to Daramola ¹⁶ is made up of forestry, livestock, fishing, food and cash crops such as yams, cassava, maize, cocoa, groundnut and oil palm. The country is largely endowed with natural resources that are necessary for the development of agriculture. Such resources include abundant land supply, human and forestry resources. The country has a total land area of about 98.3 million hectares out of which 71.2 million hectares (72.4%) are cultivable, but only 34.2 million hectares (34.8%) are under use. According to Bakare ², rural Nigeria is divided into seven agro-ecological zones; i.e. semi-arid, found only in the northern region; the savannah, found in the northern and middle region; a small highland area found in the middle and southern region; a larger transition environment of savannah derived from the forest overlapping the southern and middle regions; mangroves in the Niger Delta; freshwater swamps in the Niger Delta and Lowland rain forest in the south. The agro-ecological setting and technology base, in principle, determine the production systems. Two major production systems dominate these zones: (i) the traditional production system, which is found in all parts of the country and consists of land holdings of less than 2 hectares ⁵ with a variety of food crops intended for consumption purposes mainly and (ii) the improved irrigation production system which comprises the improved small-scale irrigation using low-lying or water logged areas for crop and livestock production, as well as large-scale mechanized and/or commercial irrigation farming systems.

With an estimated population of 140 million people ^{17, 18}, growing at the rate of 3.65%, per year, it means that by the year 2025 the nation’s population will be about 201, 320,000 million people (an addition of about 61.32 million people in 12 years). If the food production growth trend of 1.35% annually is not increased to tally with or surpass the population growth rate, then the country will be in for a turbulent future ^{18, 19}. At independence in 1960, Nigeria and some South-East Asian countries stood at par socio-economically. Over the past 30 years, the South-East Asian countries (Malaysia, Indonesia, and others), invested 10%, to 20% of their annual capital budgets into agriculture leading to massive economic transformation of their countries ²⁰. Agriculture has suffered from years of mismanagement, inconsistent and poorly conceived government policies, and the lack of basic infrastructure. Still, the sector accounts for over 26.8% of GDP and two-thirds of employment ¹⁸.

Agricultural cooperatives exist in different forms to help farmers meet their socio-economic needs and aspirations. The type or form of the cooperative depends on the problem facing the cooperative members. Onugu and Uguanyi ²¹ stated the types of cooperatives linked to agriculture. They include: Thrift and credit cooperative societies, farm supply cooperatives, agricultural marketing cooperative societies, farmers multipurpose cooperative society, agricultural insurance cooperatives, women agricultural cooperative, cooperatives for water supply and control, cooperative for poultry, livestock breeding and related services, cooperatives for pasture improvement and management, cooperative in forestry and cooperative for fishery production. Farmers’ membership of cooperatives is to enable them gain better access to various agricultural inputs and facilities which invariably leads to increased output for the farmers.

According to Onugu and Uguanyi ²¹, agriculture is a key contributor to the Gross Domestic Product (GDP) and to the economic development of the country. Agricultural Co-operatives Societies are involved in so many aspects of agricultural activities directed at giving farmers the support to raise their productivities and income level. Such supportive activities include: land acquisition, agricultural mechanization and Technology, farm supply, technology adoption and credit facilities.

Income refers to the earnings of the individuals either by working as a farmer, businessman or a manufacturer. It can be in the form of wages, interest, rent and profit. The primary reason a farmer should borrow money for his business is to increase his income. There are lenders, of course, whose sole consideration is the security of the credit extended. Under such a narrow policy, loans are made regardless of whether or not the farmer will benefit in the end, the only criteria being that the physical security amply protect lender in case of difficulty. This discussion, however, assume that credit is intended as an aid to the farmers in carrying on his business.

This study adopted the ‘Social Action Theory’ and ‘Group Action Theory of development’. These theories became relevant to the study because they are community oriented models. The Social Action Theory was founded by Max Weber in 1932. The Social Action Theory is a community-oriented model that is used to increase the problem-solving ability of entire communities through achieving concrete changes towards social justice. That is, individuals within communities come together to redress the imbalance of powers or privileges between a disadvantaged group and society at large. Although this community-community-organization model is applicable to many social issues, that are disproportionately affecting certain communities. The Social Action Theory applies key concepts and tenets that are used within many community-organizing and community-building models. Minkler, Wallerstein and Wilson, ²² simply put these key concepts and tenets to include empowerment, critical consciousness, community capacity, social capital, issue selection, and participation and relevance. Applying the Social Action Theory to our study, shows that individuals feel more empower when they work together in cooperative to strengthen their businesses thereby improving their economic status. Again, joining cooperative raises critical consciousness in an individual. This is because joining cooperative avails a member the opportunity of engaging in productive dialogues, forums, and discussions that clearly relate how their social and economic problems and their root cause can be solved through social action. By joining cooperative, capacity building is possible as members are privileged to enhance their leadership and management ability in many ways, such as through skill-building workshops that allow members of the cooperative to become more effective leaders. In cooperative, there is a value of trust, reciprocity, and civic engagement which can connect individuals in a fragmented community across social boundaries and power hierarchies, facilitating community building and organization. More so is the Group Action and Development theory. This theory was propounded by Mancur Olson in 1965, which seeks to understand how groups of individual are able to come together to overcome their individual and collective problem ²³. Group action in cooperative requires involvement of a group of people, a shared interest within the group and involved on some kind of common action which works in pursuit of that shared interest. Members can contribute in various ways to achieve the shared goal, money, labour among others. This action should be voluntary in order to distinguish group action from hired labour. This theory was chosen on the basis of people coming together to form an autonomous group with collective interest. This is in line with the 1995 ICA principles of voluntary and open membership, autonomous, and independent association of person with common interest. The Group Action Theory also creates a sense of community that increases the ability of the cooperative members to work together collectively and participate in group decision making. This boosts members self confidence, self reliance and self esteem within the community.

3. Materials and Methods

The Survey research design was used for the study. The choice of this design is because it enables a researcher to gather data from the total sample obtained from the population of study and generalization of findings easier.

This study was carried out in Anambra State and in particular, the agricultural zones of the State. Anambra State is in South-Eastern zone of Nigeria. Its name is an Anglicized version of the original 'OmaMbala', the native name of the Anambra River. The capital and the seat of government is Awka. Onitsha and Nnewi are the biggest commercial and industrial cities, respectively. Boundaries are formed by Delta State to the west, Imo State and Rivers State to the south, Enugu State to the east, and Kogi State to the north. The origin of the name is derived from the Anambra River (Omambala) which is a tributary of the famous River Niger ²⁴. The indigenous ethnic groups in Anambra State are the Igbo (98% of population) and a small population of Igala (2% of the population) who live mainly in the north-western part of the State. Anambra is the eighth most populated State in the Federal Republic of Nigeria and the second most densely populated State in Nigeria after Lagos State. The stretch of more than 45 km between Oba and Amorka contains a cluster of numerous thickly populated villages and small towns giving the area an estimated average density of 1,500–2,000 persons per square kilometer ²⁴. Anambra State is rich in natural gas, crude oil, bauxite, ceramic and has an almost 100 percent arable soil. Other resources in the area are agriculture, human capacity, tourism and industries ²⁴.

The multi-staged sampling technique was adopted in the study. In the first stage, the State was divided into three agricultural zones. The agricultural zones were selected from the three senatorial zones in the States. In the second stage, a sub-sampling also called a two-stage sampling was carried out by judgmentally selecting one Local Government area (LGA) each from the agricultural zones because of their agricultural potentials making a total of three Local Governments. According to Michael, Obiokogbuo, and Anigbogu ²⁵, judgmental sampling makes use of typical cases among the population to be studied, which the researcher believes will provide him with the necessary data needed. In the third stage, the simple random sampling technique was used to select four farmers’ cooperative societies from each of the three selected local governments in the agricultural zone. Finally, the total membership size of the twelve (12) co-operative societies which is five hundred and eight (508) was selected for the study. Table 1 shows selected Local Government Areas (LGAs), communities, names of cooperative societies, and their membership strength.

The sample size for this study is three hundred and twenty four (324) members in Anambra State. This was statistically generated from the population of study using Taro Yamane formula.

Where: n = sample size

N = population

e = Margin of error (5% or 0.05)

I = Constant

Substituting in the above formula:

For the purpose of allocation of sample stratum, the researcher adopted R. Kumaisons formula. Below is the R. Kumaisons formula for sample size distribution:

where n = Total sample size

Nh = The number of items in each stratum in the population

N = Population size

nh = The number of units allocated to each stratum

n =324

Nh = Societies 1 to 12

Substituting in the above formula:

Society 1;

Society 2;

Society 3;

Society 4;

Society 5;

Society 6;

Society 7;

Society 8;

Society 9;

Society 10;

Society 11;

Society 12;

The study generated data through primary and secondary sources. Primarily, data were gotten from a unified structured questionnaire. While the secondary data were generated through textbooks, journals, internet, published and unpublished research materials.

Each questionnaire was given to two experts in the Department of Cooperative Economics and Management in Nnamdi Azikiwe University, Awka for face and content validation. They were requested to validate the instrument with reference to the appropriateness of the items, their wordings and construct. The experts were also requested to examine the items in respect of their relevance, clarity, content coverage and their appropriateness in addressing the objectives of the study. The inputs of these authorities were incorporated by the researcher in modifying the instrument to its current standard. While the reliability of the instrument was established using test re-test method. Copies of the questionnaire for the study were administered to twenty (20) respondents in Awka North LGA of Anambra State. The same instrument was administered to the same respondents after two weeks. The coefficient of reliability for their responses was established using Cronbach alpha. The Cronbach’s Alpha reliability statistics is 0.969 or 97%, which is considered sufficiently high and above the cut-off point of 0.6.

4. Method of Data Analysis

Data collected were analyzed using the Statistical Package for Social Sciences (SPSS). Specifically, the Bio-Data of the respondents were analyzed using table of descriptive statistics, frequencies and percentages. The research objectives were addressed through mean ratings that are based on a threshold of 4-point likert-scale. The likert rating scale is as follows:

Strongly Agree (SA) 4 points

Agree (A) 3 points

Disagree (D) 2 points

Strongly Disagree (SD) 1 point

The following decision rules were applied; item with mean scores equal to or greater than 2.5 were regarded as agreement, while those with scores lower than 2.5 were regarded as disagreement. T-test statistics were also used for further analysis, hypothesis one to three were addressed using t-test analysis.

5. Result and Discussion

Table 2 revealed that, 88.9% of the respondents were ordinary members of the cooperative societies. 3.8% of the respondents were Presidents, 4.2% of the respondents were secretaries, while 3.1% were treasurers. On the gender of the respondents, 59% of the respondents were males, while 41% were females. The Table further revealed the age distribution of the respondents, 10% of the respondents fell within the ages of 18-30years. 20.5% of the respondents fell within the ages of 31-40 years. 54.2% of the respondents fell within the ages of 41-50 years, 10.1% fell within the 51-60 years, while 5.2% fell within the ages of 61years and above.

On the marital status of the respondents, 87.2% of the respondents were married, while 12.8% of the respondents were single. On the educational qualifications of the respondents, 19.8% of them had primary education. 49.3% of the respondents had secondary education, while 30.9% had tertiary education. The Table also showed that 7% of the respondents had been members of cooperative for a period between 1-5 years. 8% of the respondents had been members of cooperative for a period between 6-10 years. 51% of the respondents had been members of cooperative for a period between 11-15years. 22% of the respondents had been members of cooperative for a period between 16-30 years.

The respondents’ household size revealed that 19% of the respondents had between 1-3 persons. 53% of the respondents had between 4-6 persons. 21% of the respondents had between 7-9 persons, while 6% of the respondents had between 9-12 persons as household size. On the farm size, 4.5% of the respondents had less than 1 plot of land. 49.7% of the respondents had between 1-4 plots of land. 34.7% of the respondents had between 4-7 plots of land, while 11.1% of the respondents had between 8-15 plots of land as farm size. The Table showed the membership strength of the respondents which indicated that all the groups had membership strength of more than 10 people.

Table 3 revealed that the effect of agricultural cooperative membership on income of members is significant through the credit need of members been satisfied, Members of agricultural cooperative enjoy better price when they market their farm produce through the society, Farm output of member increased as a result of steady supply of fertilizers, low incident of pest and diseases recorded. High quality farm seedlings lead to increase in agricultural output of members invariable leading to increase in members income, Credit need of members were satisfied. Agricultural production functions were made easy for members as a result of low interest rate. Credit needs of members were satisfied leading to an increase in forces of production income among others.

The household income level of the respondents before joining agricultural cooperative as observed in Table 4 indicated that 9.7% of the respondents earn between N 1,000 - N 10,000 per month. 15.3% of the respondents earn between N 10,100 - N 20,000 per month. 16.3% of the respondents earn between N 20,100 - N 30,000 per month. 42% of the respondents earn between N30,100 - N 40,000 per month, while 17.7% of the respondents earn between N 40,100 and above per month. However, it was further observed from Table 4 a significant difference in the income level of the respondents after joining agricultural cooperatives as the Table below indicated that 2.1% of the respondents earn between N 1,000 - N 10,000 per month. 3.8% of the respondents earn between N 10,100 - N 20,000 per month. 13.9% of the respondents earn between N 20,100 - N 30,000 per month. 27.1% of the respondents earn between N30,100 - N 40,000 per month, while 53.1% of the respondents earn between N 40,100 and above per month. In deed, a significant difference in the income level after joining agricultural cooperatives.

The major challenges faced by members of the agricultural cooperative in improving their income as indicated by the respondents in Table 5 revealed that shortage of skilled manpower, lack of cooperative education, insufficient funds to finance their activities, poor capitalization, ideological conflict, wrong notion of cooperatives among others.

Ho₁: Membership of agricultural cooperatives has no significant effect on the income level of cooperative members.

Table 6 revealed that membership of agricultural cooperative has no significant effect on income level of members. The t-test statistics was employed. The summary of the t-test values showed that the t-calculated value 10.969 was significant at 0.000 significant level. This implies that there is a significant effect of membership of agricultural cooperative on the income level of members. More cooperative membership should be encouraged among famers and beyond.

Ho₂: There is no significant difference in the income level of members before and after joining agricultural cooperatives.

Table 7 showed the summary of t-test values. The result of the test showed that the t-calculated value of 4.499 was significant at 0.000 significant level. This implies that there was a significant difference in the income level of members after joining cooperative.

Ho₃: There are no significant challenges faced by members of the agricultural cooperative in improving their income level.

The summary of the t-test values is shown in Table 8 on significant challenges faced by members of the agricultural cooperative in improving their income level. All the t-calculated values were significant at 0.000 significant level. This implies that there were significant challenges faced by members of the agricultural cooperative in improving their income level.

6. Conclusion

Cooperative membership avails members the opportunity of pulling their resources together in order to increase their income level. The study has made it clear that membership of cooperative has a significant effect on income level of member. Hence, regular awareness of the public as well as famers in our rural areas on the activities of cooperatives and its attendant benefits will go a long way of drawing many to join cooperatives. It will also be imperative to conclude that challenges facing the members of agricultural cooperative such bad management, inadequate capital, lack of access to processing facilities, poor mechanization and wrong notion of cooperative can be ameliorated through government intervention in cooperatives through availability of funds and training of cooperative farmers in improved methods of farming since majority of our population engage in agriculture. This undoubtedly will lead to improving the standard of living of the greater populace who are engaged in the agricultural activities in the rural areas. Government should also help out by mechanizing agricultural activities and make farming more attractive and lucrative.

Acknowledgements

The authors wish to acknowledge the entire lecturers in the Department of entrepreneurship studies of Chukwuemeka Odumegwu Ojukwu University, Igbariam, Anambra State. And also of the Department of Cooperative Economics and Management, Nnamdi Azikiwe University, Awka. Anambra State. Nigeria.

References