DEBRE MARKOS UNIVERSITY

BURIE CAMPUS
THE PRACTICAL ATTACHMENT
REPORT DEPARTMENT OF
SUBMITTED TO AGRIBUSINESS
AND VALUE CHAIN MANAGEMEN
 THE ROLE OF DAMOT UNION
MULTIPURPOSE FARMERS
COOPERATIVE IN IMPROVING THE
LIVING STANDARD OF SMALL
HOLDER FARMERS IN DAMOT UNION
BURIE WOREDA WEST GOJAM ZONE
COMPLIED BY

YENESEW BAYH
ID NO .1106/11
ADVISOR MAMARU. (MSc)

February 2013 E.C

BURIE, ETHIOPIA
ACKNOWLEDGEMENT

First and all most, I would like to thanks almightiness God for directing me with this true
spirit from the beginning to the ending, and also, I would like to thanks my advisor (M.c.s)
Mamaru for his constructive, detail valuable comments and advice made this work
possible.

Next, I would like to thanks Debremarkos university Burie campus department of

agribusiness and value chain management for giving chance for me to prepare these
internship paper.

Besides to these I would like to thanks all members, manager, and employs who helped us a
lot by showing every detail thing and I would like to thanks my parent for their ultimate
support.

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TABLE OF CONTENT

Contents
ACKNOWLEDGEMENT.......................................................................................i
ACRONYMS AND ABBREVIATION.................................................................iv
ABSTRACT.............................................................................................................v
1. INTRODUCTION...............................................................................................1
1.2 History and Background...........................................................................1
1.2 The vision and mission of the organization.............................................2
1.2.1 The vision........................................................................................2
1.2.2 The mission......................................................................................2
1.3 Principle and value....................................................................................2
1.3.1The principle....................................................................................2
1.3.2 The values........................................................................................3
1.4 Objective of the organization...................................................................3
1.5 objective of these practical attachments..................................................3
1.5.1 General objective............................................................................3
1.5.2 Specific objective............................................................................3
2. LITERATURE REVIEW...................................................................................4
2.1 Definition of terminology..........................................................................4
2.2 Basic concept of cooperatives...................................................................4
2.3 Salient feature of the cooperative.............................................................5
2.4 Some role cooperative for value chain development..............................5
3. METHODOLOGY OF STUDY.........................................................................6
3.1 Geographical description..........................................................................6
3.3 source of data and collection method.......................................................6
4 Discussion of cooperative of Damot Union.................................................6
4.2 Function and service of organization.......................................................6
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 4.2.1 Function...........................................................................................7
4.2.2 Service..............................................................................................7
4.3 Source of fund and rule of the cooperative to be a member..................7
4.3.1 Source of fund.................................................................................7
4.3.2 Rule of the cooperative to be a member.......................................7
4.4 Relation (linkage)to other organization...................................................7
4.4.1 Relation to enterprise.............................................................................8
4.5 Some constraint and challenge which faced me difficult during task
and waiting.......................................................................................................8
4.6 knowledge and experience gained during practical attachments.........8
4.7 Some challenge of these cooperative........................................................9
4.8 SWOT Analysis..........................................................................................9
4.8.1 Strength...........................................................................................9
4.8.2 Weakness.......................................................................................10
4.8.3 Opportunity...................................................................................10
4.8.4 Threat............................................................................................10
5. Summary, Conclusions, and Recommendation..............................................10
5.1 Summaries & Conclusions......................................................................10
5.3 Recommendation.....................................................................................12
REFERENCE........................................................................................................12

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ACRONYMS AND ABBREVIATION

MPFCs Multipurpose Farmer Cooperatives

DC U Damot Cooperative Union
SWOT Strength Weakness Opportunity and Threats
ICA International Cooperative Alliance
ECX Ethiopia Commodity Exchange
BOD Board of Director

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ABSTRACT
Cooperatives are present in all countries in all most all sector including agriculture, finance,
insurance and credit. A cooperative is an autonomous association of person united voluntarily
to meet their common economic, social and cultural needs and aspirations through jointly
owned and democratically controlled enterprise. Agriculture continues to be the engine of
economic growth in most in our country. Hence strong cooperatives are able to overcome
many of difficulties which faced by the farmers. These reports conduct in damot union
multipurpose primary farmers’ cooperative in the specific objective through including the
role, SWOT analysis, challenge and factor of the cooperative which limit the development.
Cooperatives are recognized as an important instrument for socio economic improvement of
the community. Those are agricultural marketing, production and productivity enhancement,
Infrastructure development, investment opportunity, human resource development and
promote labor efficiency and rural development. The principles and values of cooperatives lied
down by ICA1995 are includes: -volsssssuntary and open membership, democratic control,
member economic participation, education, training and information, cooperation among
cooperatives, autonomy and independency, concern for community, self-help, self-
responsibility, democracy, equality, equity and solidarity. Fort his attachment both primary
and secondary sources of data have been used. The primary data were collected from
member’s interview, and prepare questioners. And secondary source of data was collected
from annual reports and by viewing different documents of the cooperative. The cooperative
has a total of
nine(9)woreda,79versatil member &180,000primery farm cooperative for 2013 E.C. Factors
that limit the development of cooperatives are:-lack of skilled man power, lack of government
initiation, shortage of input, lack of cooperation and information sharing, lack

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 1. INTRODUCTION
Cooperatives are democratic, member-run and member-financed enterprises. They have been a
model for bringing together people across all spheres of society in common economic and social
interests. Cooperative business is owned and controlled by the people who use its services and
whose benefits are burie woreda society &other member of the union by the users on the basis of
use (USDA, 2002). Cooperative enterprises put social justice and equity at the heart of economic
progress. As member-owned, member-run and member-serving businesses, cooperatives
empower people to collectively realize their economic aspirations, while strengthening their
social and human capital and developing their communities. Cooperatives play an important role
in achieving social stability and social inclusion. Being member-owned and run cooperatives also
contribute to keeping the production of goods and services close to the needs of the people that
they serve.

1.2 History and Background

Ethiopia is predominantly an agricultural country with the majority of population directly
involves in the production of crops and livestock. Agriculture accounts for half percent of the
gross domestic production (GDP), 85% of the employment and over 90% of foreign exchange
income of the country. This indicates that the level of economic development of the country is
determined by the growth of the agricultural sectors.
Burie damot union multipurpose farmer cooperative is one type of cooperative which is
established in 1993 E.C in order to eliminate common economic problem. . It formed with nine
(9) woreda member 79 versatile member&180,000primery farmers. The initial capital 85000
birr; and Now a day the total capital170,000,000 birr. It has their own vision, mission, principle,
value; and objective.

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1.2 The vision and mission of the organization
1.2.1 The vision
 Create strong and consistence cooperation work of cooperative.
 See economic and social prosperity and successes of members (farmer society) and
other society

1.2.2 The mission

By carrying the aim of economic and social development create substance and spiritual
coordination among every individual member to build self-confidence, and conduct self-
help and self-help ethics to ensure the benefit of farmer society.

1.3 Principle and value

1.3.1The principle
Cooperative principle is the seven guidelines by which cooperatives put their values in to
practice often called the seven Roche dale princple. Those principle are the heart of
cooperatives are not independent each other. they are linked where the one ignored all are
diminished, cooperative should be judged exclusively on the basis of any one principle
rather they should be evaluated how they adhere to the principle of their entity.

1. Voluntary membership: any person who is willing to accept the responsibilities of

cooperative. And who wishes to use service of the cooperative is welcome to become a
member.
2. Democratic member control: the cooperative are control and own by the member in
setting policies and decision making.
3. Member economic participation: member contributes to the capital of the cooperative
democratically and equitably.
4. Autonomy and independence: cooperative are not subject to control by outside
organization. Cooperative is autonomous self-help organization controlled by their
member.
5. Education training and information: a cooperative provided education and training to
the member and board of director to allow them to contribute to the development of the
cooperative.

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6. Cooperation among cooperative: several cooperative united together formed other level
of cooperative such as, union, federation, and league. Or cooperative often work
together creating regional, national and international structure which help to improve
the communities and to create a better world.
7. Concern for community: the member of the cooperative approved the policies in order
to develop the community around the cooperative in a sustainable way.

1.3.2 The values

• Self help
• Democracy
• Self-responsibility
• Equality
• Equity
• Honesty
• Caring for others
• Social responsibility
• Solidarity

1.4 Objective of the organization

• Ensure the benefitoffarmersocietybyminimizingnumberofbrokerandintermediater
• Serve community (to solve common economy and social problem)
• Promote better home and higher living standard of the farmer
• Increase production and productivity of agricultural product

1.5 objective of these practical attachments

1.5.1 General objective
General objective of these practical attachments is assessing the role Of damot
multipurpose farmer cooperative improving the living standard of farmers households in
burie woreda west Gojjam zone Amara regions

1.5.2 Specific objective

The specific objectives of the practical attachment are:
1. To know the role, structure and challenge of the cooperative.

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2. To know the strength, weakness, opportunity, and threat of the cooperative.
3. To know the role of cooperative for value chain development.
4. To know the constraint (factor)which limit the development the cooperatives

2. LITERATURE REVIEW
2.1 Definition of terminology
Cooperative: It is the association of individual united voluntarily to solve their common
economy social and cultural problem and to meet their aspirations through a jointly
owned and democratically controlled enterprise (ICA, 1995).

Cooperation: Working, living and thinking to gather.

Multipurpose cooperative: combine two or more of the business activities of these

different type of cooperatives. For example, seed multiplication, commodity exchange,
processing of agricultural product, mechanization, credit lending and production
provision of good and service. Or able to provided several services.

2.2 Basic concept of cooperatives

Cooperative is a voluntary association of persons whose motive is the welfare of the
member. it is a business that is owned and operated by and for the benefit of its
member. it is formed when several people identify unmet need. (source Ivy wing more)

Cooperative is voluntary associations organized by individual who are willing and able
to do so in any sector and any type for their own benefit. It is open to anyone who meets
the criteria of membership without artificial limitation.

Cooperative is formed by a group of actors. What all cooperatives are common is that
they are owned and control by their member. And the cooperative has dual nature of
being both association and enterprise at the same time, means that the cooperative must
balance between serving its member and satisfying customer; as social enterprise they
have obligation to social function.

Cooperative lead by board of director and it service motive rather profit maximization.
Cooperative is limited liability of the membership for the cooperative society during

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 liquidation and the entry and exit of the member does not affect the cooperative, and
also the individual member burie damot union dose not inheritance .

2.3 Salient feature of the cooperative

Some difference found in the cooperative is purpose, ownership, control and
distribution of benefit. To identify their distinct characteristic of cooperative follow
three principles. Those are:
User-owned: the person who own and finance the cooperative are those who use the
cooperative.
User-controlled: those who use the cooperative also control it by electing board of
directors and voting on major organization issue.
User-benefit: the primary purpose of cooperative is to provided and distributes benefit
to members on the base of their use.

2.4 Some role cooperative for value chain development

 Agricultural marketing

 Enhancing of production and productivity

 Development of infrastructure

 Promote farmer labor efficiency

 Rural development

 Cost effective way of managing both large and small farm

 Investment opportunity

 Human resource development

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 3. METHODOLOGY OF STUDY
3.1 Geographical description
These practical attachments were conducted in burie Woreda
(Damot union) which found west Gojam Amhara regional state in Ethiopia.

3.3 source of data and collection method

Quantitative data were used to asses and analysis the role of burie damot farmers
multipurpose primary cooperative. Use primary source (i.e. interview and focus group
discussion) and secondary source (written document).

4 Discussion of cooperative of Damot Union

4.1 organization of cooperative structure

Figure 1

primary
leg federation union
cooperative

Figure 2 market structure

Suppliers
Distribution Center

Manufacture Storage Transport

Facilities Vetches Retailers
Facilities

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4.2 Function and service of organization
4.2.1 Function
 Buying the member agricultural product with right price and supplied todamot
cooperative union.
 Give training and extension service to member.
 Distribute industrial product and improved seed to the member which is supplied from
damot union
 Increase value from member’s product with in affordable way
 Enhance production and productivity through providing modern, improved, and new
technology to the member

4.2.2 Service
 Credit service  Crop purchase service
 Provide good and service  Providing input services

4.3 Source of fund and rule of the cooperative to be a member

4.3.1 Source of fund
It formed with community themselves in self-initiation and get legal status through
cooperative law. Source of cooperative are member registration fees and share. Member
finance their cooperative through:

 direct contribution through registration fees or purchase stock

 by agreement to with holding a portion of net earnings (profit)

 By assessment based on unit of product sold and purchased .and also the member
financial are base that help another investor to invest particularly bank.

4.3.2 Rule of the cooperative to be a member

 Age above fourteen year
 The permanent work is farmer

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  Able to pay the registration fees and purchase minimum stock
 A person who live around the members
 A person who is not a member of other cooperative
 A person who is not an employ of the cooperative
NB. a person that full fill the above rule and paid financial contribution thenat the time the
membership application is submitted.

4.4 Relation (linkage)to other organization

These multipurpose farmers’ cooperative purchase crop from farmer (producer)with right
price and supplied it to damot union. the crop includes: , Wheat, and
Producer Kebele cooperative
(farmer)
E.C X
Multipu Union
rpose
coopera
tive

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 Figure 1 : Chain (linkage) for follow of agricultural crops

 Damot union provided agricultural product such as wheat .

4.4.1 Relation to enterprise

This cooperative received improved seed (i.e. wheat, maize, Teff) from different enterprise
that produced, and provided it to the member. Those enterprises includes:dega damot
enterprise, baguna enterprise, kuch enterprise, Dembecha enterprise and wangedam
enterprise. But the cooperative received improved seed from enterprise that win tender
(contract) and best in win win strategy. Means that the enterprise provided the right
product (good and service) in the right quantity, in the right quality, for the right client, in
the right place, at the right time, and in the right price (provide input that both parity are
equally advantagable)

4.5 Some constraint and challenge which faced me difficult during task and
waiting

 Lack of awareness about agribusiness and value chain management

 Unwillingness to accept application letter

 Lack of full information about the cooperative

 Lack written document

 Shortage of finance

 Unwilling to integrate me in the activity

Lack of suitable road.

4.6 knowledge and experience gained during practical attachments

 Understand and aware the theoretical knowledge through practice
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  Understand the aim of cooperative and how it minimize the number of intimidate r
and other broker owing to their formal structure and provision of service in
communal base

 Understand work ethics and related issues

 Understand the role of cooperative

 Understand distinct characteristic of cooperative i.e user owner, user benefit, and
user control

 Understand the important of syringe and effective communication

4.7 Some challenge of these cooperative

 infrastructure such as: road, electric power and service which make other service
cost maximum.
 Access of area (land): poor access of land which is difficult for loading and
unloading 0f improved seed and industrial product (organic fertilizer, oil, sugar).
 Shortage of input: cooperative does not supply agricultural input with in right
amount.
 Shortage of ware housing: all products are stored inseparability.
 Lack of government initiation &not punctuality.
 Inflation which make members unreliability

4.8 SWOT Analysis

4.8.1 Strength
 Enough members

 Increasing member satisfaction.

 Enough capital.

 Strong relation to other organization

 Increasing women participation

 Alleviating poverty.

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4.8.2 Weakness
 Low skilled man power
 Weak work ethics particularly, punctuality, fairness
 Low awareness among the member
 Limited experience& practice on value chain.
 Poor product quality
 Disagreement among members

4.8.3 Opportunity
 Participation of the member increase
 Increase number of the member
 The cooperative education and training conduct in organized manner
 Existence of good transportation facility.
 Giving service at a discount for member.
 Economic growth.

4.8.4 Threat
Threats are unfavorable condition in the organization of environment which
cause damage the organization.
 late delivery of commodty.
 Lack of government initation
 Lack of fair treatment among user
 Political instability (conflict)
 The member loses service reliabilty
 Lack of input suppliy

5. Summary, Conclusions, and Recommendation

5.1 Summaries & Conclusions
The cooperative principle and value which lied down by I CA in 1995 includes voluntary
and open membership, democratic control, member economic participation, education
;training and information, autonomous and independence ,cooperative among cooperative
and community concern ,and self help , democracy, self responsibility, social responsibility,

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honest, caring for others, equality, equity, and solidarity.

Cooperative has salient feature that made unique to other business organization such as:
user owner, user control and user benefit. In additional to these the cooperative based on
members and organization voluntarily that of their common problem. And some role of the
cooperative are agricultural marketing, rural development, promote farmer labor
efficiency, enhance production and productivity, investment opportunities, human resource
development infrastructure development, cost effective way of managing both large and
small farm.

These internship done by using both primary and secondary source; the primary source of
data collected from member of cooperative and worker through directly interview them
and secondary data collected by observing different via written document, and by
referring annual report.

The cooperative is unique among business organization on that they are owned and
controlled by the same people who use the service. today cooperative becoming increasingly
large and complex. But they still depend on the members patron. Farmer multipurpose
cooperative is one type of cooperative that organized by farmer with in the objective of
providing more than one service for themselves. it promotes integration of economic
activity such as mobilizing capital to provided credit and input for agricultural production
to the member. Generally cooperative and MPFCs in particularly issued as a key pillar in
rural development strategy of Ethiopia to address the existing malfunction agriculture
marketing system.

The cooperative has principle and value that declared by ICA to smooth the follow of
activity and use as guideline those are: principle (voluntary membership, democratic
membership, membership economic participation, education; training, autonomous and
Independence, community concern, cooperation among cooperative), and value (self-help,
equity. equality, self-responsibility, social responsibility, solidarity, and honesty). the
constraint of these cooperative is shortage of input, lack of skilled man power, poor
management, lack of awareness among the member, and poor infrastructure.

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5.3 Recommendation
Rather to divided the disposal (profit)which is generate during provided service strength
their capital and coordination to provided other service like: milling

The government work together with cooperative to manage market alignment and inflation
rate.

The cooperative worker and member have smooth relation and remove any disagreement
and also honesty each other so as to attract the nonmember as well as to easy the follow of
activity.

They could be creating strong awareness among the member about the activity which are
performed under the cooperative and aware the purpose, ownership of the cooperative for
them.

Cooperative encourage women by provide affirmative action, like prize, prepare certificate
paper for those female members and increase their participation in any aspect.

To enhance the development of the cooperative the government and other institution
engage a program to increase the participation of members specially women and youth.
and also engage in the cooperatives and development through begun strength the need on
human resource, finance and materials.

To modernized the cooperative management system and to provide services to the member
in seven R way use modern and improve tools and equipment. and the cooperative provide
farmer material like tillage material, pesticide and herbicide rather to provided small good
and service

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 REFERENCE
International cooperative alianess (1995) principle and damot
multipurpose primary farmers’ cooperative annual report and document2020 E.C
Chawku(1996),Ivywingmore, encryptedtbno
Direct observesion ,asking manger ,employer&othersociety.
United state of Development Agence ,USDA .2002.

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