Evaluation on Grain Marketing Efficiency of Merkeb Multipurpose Farmers’ Cooperatives Union

The Ethiopian farmer in its marketing tradition usually inflicted by different negative outcomes of market particularly lack of bargaining power and internal and external pressures to sell his products immediately after harvesting season while massive supply of grain use to bring to the market. The cooperative grain marketing activities in the country is the newly emerging phenomenon. By now it is following a growing trend and affluent everywhere. The research concentrated on the evaluation of the efficiency and performance of Merkeb Multipurpose farmer's cooperatives union and affiliates in the area of grain marketing. The union has 56 affiliated primary cooperatives having 106,574 individual members being one of the largest cooperative unions in the Amhara Region. This evaluation has been done in terms of operational and pricing efficiency, which are the common parameters of efficiency measurement for marketing. The operational efficiency of the union and affiliates as disclosed by the survey results is found at its lower level than the expected. They are not well accessed to the individual members where as their competent traders use to penetrate the entire rural areas through establishing grain assembling sites. The storages under the affiliated cooperatives are not well organized and managed. They are unoccupied most of the time in the year after selling the grain while depreciating every year exposing the cooperatives for continuous losses.The technical efficiency of traders is by far better than the organized cooperative system. They hold the upper hand and able to attract farmers through provisions of interest free loans for immediate money demands, forwarding the prevailing market prices of grain. They could purchase more than 70 per cent of the marketed grain. Farmers are hesitating to work with cooperatives and more than 30 per cent dissatisfied with the marketing methods of cooperatives. Traders are benefiting from the marketing margins of grain trades through acquiring 18.06 per cent 0f marketing margin (70.3 per cent) from maize crop in the 2003/04. The trend was reverted in 2004/05 where the share of the union improved to be 11.4 from 4.86 or (from18.9 to 66.6 per cent.). Regardless of this improvement, the union by now withdraws itself from grain marketing fearing the VAT registration. Yet, grain marketing should be the priority area of the union and affiliates since they are the organizations of farmers whose interest is improving the bargaining power in the grain marketing system. As per the results of the survey all common problems of cooperative societies are also observed in the union and the affiliates such as poor management, ineffective execution of various functions, corruption and negligence of responsibilities of the cooperative functions. As far as cooperatives are new forms of farmers’ organization in the rural Ethiopia, they lack the required capacity to promote the functions of marketing and even the management of cooperative organizations. It is therefore necessary to take immence intervention in the area of capacity building, provision of inputs, and continous awerness creation among members to remove the misconception about cooperative societies that developed from the previous socialist policies of the military government