Page 1 of 10
Journal for Studies in Management and Planning
Available at https://pen2print.org/index.php/jsmap/
ISSN: 2395-0463
Volume 04 Issue 09
September 2018
Available online: https://pen2print.org/index.php/jsmap/ P a g e | 118
Membership of Cooperative Soceities and Farmers’
Financial Capital Accummulation in Arochukwu L.G.A of
Abia State, Nigeria
By
Ume Chukwuma Otum1
, Ugwuoke Chukwuchebe Obiajulu 1
, and Ihedioha Nice Nneoma1
1Department of Agricultural Economics, University of Nigeria, Nsukka
Corresponding email: chukwuma.ume@unn.edu.ng
Abstract
This study was carried out to determine the effect of farmer’s cooperative societies on members’
financial accumulation in Arochukwu Local Government Area of Abia State. The specific
objectives were to compare the ease of access to credit and the level of farm income available to
members and non-members, and also to identify the major constraints the members face towards
credit acquisition. Five towns were randomly selected for the study. Out of each town, six
cooperative members and six non-members were randomly selected, giving a total of thirty
cooperative members and thirty non-members. The data were generated using structured
questionnaire and analysed using descriptive statistics and t-test. The results showed that the
members of cooperative societies had more ease of access to credit facilities, and also level of
farm income available to members was higher than that of non-members of cooperative societies.
This difference in farm income was statistically significant at 5% alpha level. More so, the study
unravelled the constraints of the cooperative members towards credit acquisition. Most of the
members believed that belonging to a cooperative society can alleviate some of the problems- especially the problems associated with collateral and high interest rate. The research thus
indicated that cooperative societies have the capacity to increase member’s access to credit and
therefore ultimately increase member’s financial accumulation. Therefore, there is need for
government to improve the capital base of cooperative societies through the annual budget of the
country and co-operative research and organization of symposium and public lectures with a
view to enhance the efficiency of co-operative movement in Nigeria should be encouraged.
Keywords: Cooperative societies, Financial capital, Capital accumulation, Interest rate, t-test
Page 2 of 10
Journal for Studies in Management and Planning
Available at https://pen2print.org/index.php/jsmap/
ISSN: 2395-0463
Volume 04 Issue 09
September 2018
Available online: https://pen2print.org/index.php/jsmap/ P a g e | 119
1.0 Introduction
The cooperative societies are formed with the idea of mutual cooperation (Aweto, 1996). Every
cooperative society is formed to render services to the members’ rather than to earn profit. In the
quest to restore agriculture to its former position in Nigerian economy prior to the discovery of
oil (which led to the neglect of the sector), one of the approaches that has been deployed is the
use of agricultural cooperative to achieve the goal (Barton, 1999)
However, the study intends to unravel the extent co-operators seem to gain or reap substantially
from the membership of cooperative societies in terms of financial capital accumulation and the
improvement of their welfare status. The ultimate questions now are: to what extent have the co- operators benefited from joining a cooperative society in terms of financial capital accumulation?
What are the constraints confronting the members in achieving the objective of the cooperative
society?
Many research works have been carried out on the effect of cooperatives in some part of the
country (Berko, 2001; Bhuyan, 2007; Borgens, 2001; Chukwu, 1990) but available information
shows that little or nothing has been done in this regard in the study area. Agriculture in the post
independent years was the main stay of Nigeria economy, but suffered serious neglect due to the
oil boom in 1970’s. Agricultural production which then contributed about 80% to Gross
Domestic Product (GDP) declined to less than 3% in the 1990’s and 2000’s (World Bank, 1996).
Page 3 of 10
Journal for Studies in Management and Planning
Available at https://pen2print.org/index.php/jsmap/
ISSN: 2395-0463
Volume 04 Issue 09
September 2018
Available online: https://pen2print.org/index.php/jsmap/ P a g e | 120
In order to redirect the situation, multitudes of programmes were initiated which were not able to
meet the objective for which they were designed to achieve (Smeeding et al, 2001). This scenario
was further constrained by the nation’s agricultural sector which is characterized by small farm
holdings (Audu, et al 2010). He stated further that the peasant farmers produce over 90% of the
food crop grown in Nigeria using traditional method coupled with obsolete farming implements.
This impedes self-reliance and self-sufficiency in food production, which go a long way in
lowering the socio-economic standard of the country (Ijere, 1998). To tackle this menace, it is
essential to undertake the elimination of small scale production and replace it with large scale
production. It involves the use of mechanized farming method and improved credit system; these
tasks are often easier to accomplish through cooperative societies.
This study will be of great importance in facilitating the rural farmers in the area to organize
themselves into viable cooperative societies, so that they can pool their limited resources
together, obtain credit from the government and engage in agricultural production and allied
ventures; in order to improve their produce and capital as well. More so, the research result will
be of immense help to co-operators and non-co-operators in Arochukwu local government area,
in fathoming the effect the practice of cooperative has on the area or whether there is no effect at
all.
The board objective of the study is to assess the effect of cooperative societies in member’s
accumulation of financial capital in Arochukwu local government area of Abia State.
The specific objectives of the study are:
