Do collective actions reduce household poverty? Evidence from empirical evaluation of farmers cooperatives in East Shewa, Ethiopia

Purpose Cooperatives are used as one of the strategic tools to reach smallholder farmers and reduce household poverty through augmenting access to inputs, technologies, farm productivity and markets. Our study aims to investigate the impacts of the Meki Batu Cooperative Union on reducing household poverty. Design/methodology/approach This study employed a cross-sectional survey of households in the Dugda district of the East Shewa zone in the Oromia region. A two-stage sampling design was applied, where four rural Kebeles were first randomly picked, followed by stratified random samples of 217 producers comprising 100 members and 117 non-members of cooperatives. The standard probit model was estimated with a set of observable factors. Propensity score matching (PSM), doubly robust inverse probability weighting and treatment effect estimation were performed along with matching techniques. Findings The results reveal that education, livestock assets, access to irrigation and extension contact positively determine participation in cooperatives. As the income-based poverty attests, the poverty gap was reduced by 5.9–6.3% and the severity of poverty by 3.7–3.8% due to the cooperative membership. Research limitations/implications The investigation suggests the need for continued and comprehensive social services to address development challenges through the facilitation of producers’ engagement in collective actions and agribusinesses. Originality/value Existing research evidence is inconclusive with the view of impacts of collective actions on housed welfare in Ethiopia. This study empirically tested the impacts in connection to the production and marketing of high-value crops. Peer review The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-03-2024-0231