Improving Institutional Capacity:
Strengthening Farmer Organizations in the OIC Member Countries
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where droughts periodically reverse performance gains. Therefore, reforms aimed at achieving
sustained sector growth, poverty reduction and rural development are engaging the
organisations that serve these farmers – i.e. cooperatives.
The Ministry of Agriculture, working with partners and regional bureaus of agriculture,
established the Agricultural Transformation Agency (ATA) in 2010 to address the structural
issues that constrain the sector despite its recent growth. ATA works in partnership with the
Ministry of Agriculture to think about catalytic transformational issues that must be
addressed. ATA represents a notable break with the past, as cooperatives and FOs have
historically operated in a very different environment. Beginning in the 1970s, cooperatives
were encouraged to support the state’s policy of collective ownership of property and
production. However, cooperatives formed in this period were forces to collectively produce
and market output through government-owned marketing agencies. Membership was
compulsory, contrary to the fundamental cooperative principle of voluntary participation.
However, beginning in the early 1990s, the state began to see cooperatives in another light.
Proclamations in 1998 and 2004 adopted a different tone, and reinforced cooperative
principles and incentivized membership by improving members’ rights in the areas of
ownership, voting, share transfers and risk management.103 In many ways, the establishment
of ATA was a commitment to cooperative ideals, as the ATA has a mandate to support, rather
than control co-operatives.
ATA works at a systematic level with these farmers’ cooperatives and associations. After
analysing the challenges of Ethiopia’s FOs with ATA’s help, the Ministry of Agriculture and its
agencies and stakeholders launched the Agricultural Cooperatives Sector Development
Strategy, which aims to improve the incomes and productivity of smallholder farmers. ATA
has been working with the Federal Cooperative Agency and Regional Cooperative Promotion
Agencies to implement and introduce the following interventions,104 as part of the
Development Strategy, to strengthen Ethiopia’s FOs:
 A new certification system for cooperatives , which will recognize the effective and
self-sustaining nature and professional governance structure of particular
cooperatives. This certification system will serve as a signal to farmers, financiers, and
buyers that they need to hold their FOs accountable to best practices in administration,
governance, and service provision. Moreover, the advanced certification system will
enable various partners to understand their existing capabilities and deficiencies
clearly, and foster better-targeted capacity building and training activities.
 A new auditing system that will strengthen and expand public sector audit capacity
for farmer organisations and their members. Auditors acknowledge the gap between
the quality of existing audits and the established standards of Ethiopia’s financial and
other institutions. An augmented system will involve improving auditors’ technical
skills and the preparation of an auditing manual. The process will also consider the
country’s financial reporting system and the demands of financial institutions working
with cooperatives, such as credit and savings unions.
103 Bezabih Emana, Cooperative Movement in Ethiopia. Presentation delivered at the Workshop on perspectives for
Cooperatives in Eastern Africa, October 2-3, 2012, Uganda.
104 Ethiopian Agricultural Transformation Agency Website