The Role of Potato Seed Cooperative in Improving the Livelihood of Rural Households: The Case of East Harerghe, Ethiopia Wegayehu F. & Belaineh L. 54 th Annual Conference Of the AEASA 14 - 16 September, 2016

Introduction Agriculture in Ethiopia:- - the foundation of the country's economy - accounting over 38.8% of GDP - 83.9% of exports and - 80% of total employment Generation and transfer of new technologies are important for agricultural development and transformation Seed- one of the most important inputs and a key catalyst in agricultural transformation - without seed there is no next season crop - improved varieties is an essential for increasing crop prod.

Seed production systems There are different seed production systems in Ethiopia: - Informal seed systems (80-90%) by smallholder farmer - community-based seed system - commercial seed system - formal seed systems breeding, releasing and production of different seeds Cooperative unions, private sectors, NGOs and other org. multiplication and distribution of certified seed There is a gap between demand and supply

Cooperatives In Ethiopia cooperatives are playing a crucial role in attaining food security through:- - agricultural input and output marketing - facilitating irrigation for crop production - value addition, creation of employment - establishment of small and micro enterprises Seed producer cooperatives- increase yield and income of members by pooling their resource -collective services and economic empowerment

Integrated Seed Sector Development (ISSD) ISSD was launched in 2009 to improve the seed shortage in Ethiopia, in four regions and different crops - the first phase was implemented from 2009 to 2011, with 34 Seed Producing Cooperatives (SPCs) - phase II program was started in January 2012 - East Harerghe - 3 SPCs no study has been conducted to assess the impact of potato seed production by involved cooperatives this paper provide empirical evidences on impacts of seed production on the livelihoods of the households in the respective study areas using counterfactual data

Research methodology The study was conducted in two districts (2013): - Haramaya (508 km from Addis Ababa) - Kersa (483 km from Addis Ababa) -Tinike and Ifa Jalela Sources and Methods of Data Collection Primary data had generated from (172 hhs) through: - household survey (face to face interview) - group discussions Secondary data were collected from published and unpublished sources

Methods of Data Analysis both descriptive and econometric statistical tools - Propensity Score Matching (PSM) The dependent variable is dichotomous taking two values, 1 for seed potato cooperative member 0, otherwise The mathematical formulation of logit, Gujarat (2004) Pi = Pi = Where, Pi is the probability of participation for the ith hh Zi: is a function of n-explanatory variables which is expressed Zi = B0 + ∑Bi Xi + Ui

Descriptive results of continuous variables Haramaya district Kersa district Members (N=41) Non-Members t-value Members (N=45) Non-Members (N=45) Mean STD FMS 7.09 1.97 6.29 2.88 -1.48 6.07 2.21 5.64 1.89 -0.97 TLH 1.22 0.69 0.75 0.85 1.09 1.13 0.54 0.48 TLU 4.69 1.93 1.67 2.81 2.53 2.13 1.78 -1.47 EXPR 8.34 5.25 3.88 4.28 7.04 2.99 1.58 1.98 IRREQ 9760 6309 2848 5174 3734 6057 564 1906 -2.70*** -2.98*** -6.95*** -4.22*** -10.22*** -5.42*** -3.34***

Descriptive results of dummy variables Category Haramaya district Kersa district Members (N=41) Non-members (N=41) 2 Members (N=45) Non-members (N=45) N % SEX   Male 36 87.8 35 85.4 0.105 42 93.33 40 88.89 0.46 Female 5 12.2 6 14.6 3 6.67 11.11 EDU Literate 29 70.7 19 46.3 5.025** 16 35.56 1.00 Illiterate 12 29.3 22 53.7 64.44 SOCN Available 33 80.5 11 26.8 23.74*** 31 68.9 9 20.0 21.78*** Non- available 8 19.5 30 73.2 14 31.11 80.00 EXPEC Increase 38 92.7 0.52 45 100.0 24 53.3 1.25 Decrease 0.0 13 28.9 No change 7.3 2 4.9 17.8

Variables determined participation Variables determine participation Notes: *, ** and *** denote p < 0.1, p < 0.05 and p < 0.01 Variable Coefficients Std. Err. Z- value dy/dx SEX 1.195 0.776 1.54 0.274 EDU 0.058 0.522 0.11 0.014 FAMS -0.007 0.119 -0.06 -0.002 EXPR 0.369 0.082 0.092 TLU 0.299 0.146 0.075 TLH 1.148 0.414 0.287 SOCN 2.634 0.582 0.577 EXPEC 0.747 0.624 1.19 0.186 IRREQ 0.001 0.000 District -2.704 0.705 -0.589 _cons -4.053 1.271 -3.19 -0.832 Number of obs 172   LR chi2(13) 133.25 Prob > chi2 Log likelihood -52.597373 Pseudo R2 0.5588 4.49*** 2.05** 2.77*** 4.52*** 3.14*** -3.83***

Steps to estimate ATT 1. Estimation of PSM- logit 2. Matching - the common support region- mapped using propensity score distribution 3. Choice of matching algorithm - balancing test - pseudo R2 - sample size Nearest neighbor with replacement NN(4) is the best estimator 4. Testing the balance of propensity score and covariates - standardized bias before and after matching - pseudo-R2 - two sample t-test

Balancing test of covariates

ATT estimation all ATTs for significant outcome variables were insensitive to unobservable biash members have gained greater:- annual income by Birr 33,901 - income from crop production by Birr 29,006 - total expenditure by Birr 11,728 and - total asset of Birr 47,768 than non- members Outcome variables (Birr) Treated Control Different S.E t-value INCCR 51495 22489 29006 11608 2.50*** INCLV 26678 25151 1527 4277 0.36 ANINC 84741 50839 33901 13653 2.48*** TEXPEN 39585 27856 11728 4498 2.61*** TASSET 106257 58488 47768 22004 2.17**

Sensitivity analysis PSM tries to compare the difference between the outcome variables of participants with non-participants with similar observed characteristics If there are unobserved variables that simultaneously affect the participation decision and the outcome variables - might arise and the PSM estimator may no longer be consistent Sensitivity analysis involves calculating upper and lower bounds with a Wilcoxon sign-rank test to test all ATTs for significant outcome variables were insensitive to unobservable bias

Conclusion The logit model estimates the determinants of household’s participation in potato seed producing cooperatives. - influenced by: EXPR, TLH, TLU, SOCN, IRREQ and District A positive and statistically significant impact on the livelihood indicators of members households In addition to member households, non-member households also benefited from seed producing cooperatives - member households share their experiences - access of quality seed with fair price  

Recommendations A positive and statistically significant impact of seed potato producing cooperative government and other NGO like ISSD should provide support to expand seed potato producing cooperative increasing income and improving food security in the study area and the country as a whole The contribution of irrigated crop like potato would have positive impact on asset value, income and food security of member The MoA and other concerned bodies should give attention expansion of small scale irrigation through protecting wetland loss harvesting water by using different mechanisms.

Thank You