David J. O'Brien

Measuring the Benefits of Smallholder Farmer Membership in Producer Controlled Vertical Value Chains – Survey Findings from a Development Project in East Africa

This paper reports on a study that identifies reasons why some smallholder farmers become members of East African Dairy Cooperatives while other households elect not to join.  Although members receive a slight advantage over non-members in income, the primary reasons for membership involve trust that the cooperative will treat them fairly and reliability.  The cooperatives in the survey vary considerably in the other benefits that they provide to their members, such as credit for purchase of farm inputs. The study points to both the opportunities and challenges facing smallholder cooperatives in developing countries as they aspire to get further into the value chain and improve the lives of their members, and, in particular the importance of social capital.