Impact of Cooperative Membership on Tea Marketing Strategies and Farmers’ Income in Kericho, Kenya: Use of Endogenous Switching Approach

Although cooperatives play a crucial role in reducing transaction costs and promoting better farming practices, the effects of cooperative membership on tea marketing strategies and farmers’ Income still need to be explored. This study investigates the impact of cooperative membership on tea marketing strategies and farmers’ Income. Using household-level data from tea farmers, the study used an endogenous switching regression model; the results indicate that factors such as age, land size, market access, tea plucking standards, distance, and neighbors in cooperatives significantly influence farmers’ decisions to join cooperatives. Moreover, the Average Treatment Effect on the Treated (ATT) indicates that households with cooperative membership experience a statistically significant income increase, with a treatment effect of 0.858, reflecting an 8% income rise. Similarly, the Average Treatment Effect on the Untreated (ATU) shows a 4.34% income increase for non-member households, highlighting the broader economic benefits of cooperative participation. These results underscore the empirical strategy’s robustness and affirm the cooperative membership’s positive influence on marketing strategies and household income. Consequently, the study concludes that cooperatives provide a platform for farmers to share resources, knowledge, and best practices, leading to improved agricultural techniques, increased productivity, marketing and higher incomes for members.