The Major objective of the study was to investigate the impact of cooperative membership on farmers’ income in Ethiopia. Primary cross-sectional data were collected from the total sample of 371 smallholder farmers, in East Gojjam Zone, Ethiopia. A multi-stage sampling procedure was employed. sample respondents were selected using the probability proportional technique. To analyze the data collected, different statistical techniques were employed. The binary logit model was applied to identify the most influential factors affecting smallholder farmers’ participation in agricultural cooperatives, propensity score matching to assess the impact of cooperative membership on farmers’ income, and investigate income inequality by using the Gini coefficient and Lorenz curve. Based on the findings the prominent variables that strongly influence farmers to participate in agricultural cooperatives were gender, level of education, farm activity, distance, and access to training. The PSM-estimated results revealed membership of smallholder farmers on cooperatives significantly increase total income but worsen income distribution. After membership in an agricultural cooperative, income inequality measured by the Gini coefficient increased ranging from 0.26033 to 0.27291. Demanding awareness creation measures should be taken by all the stakeholders in the study area for improving the level of smallholder farmers’ participation in agricultural cooperatives.

Keywords: Agricultural cooperatives, Farmers’ participation, propensity score matching, Smallholder farmer, Ethiopia.