Dissertation: The Degree of Master of Science in Agricultural and Applied EconomicsFarmer’ organisations are seen as key vehicles to achieve intensification and increased market orientation of the smallholder farm sector; however there are contradicting reports regarding the effectiveness of these farmer organisations to achieve these goals. In the study, the role of collective action on cocoa marketing among rural smallholder farmers in Kyela District was analyzed. Cross-sectional household data were used to analyze the effect of farmer group membership on income performance indicator, the socio-economic factors influencing smallholder cocoa farmer’s decision to participate in cocoa producer organizations and the challenges facing cocoa farmers’ groups in Kyela district. Propensity Score Matching was used to estimate the Average Treatment Effect where as Probit model was used to determine factors influencing farmers to join farmers’ organisations. Several econometric techniques such as robustness check, propensity score overlap and balancing properties were used to deal with potential selection bias in estimating the ATE of farmer group membership. The findings indicate that farmer groups have positive impact on income among the group members. Sex, age, formal education, land size owned and distance to the market significantly influenced smallholder cocoa farmer’s decision to participate in cocoa producer organizations. Pests and diseases, price instability and poor market are among the challenges facing cocoa farmers in the study area. Establishing a cocoa marketing board, more farmer organisations and investment in rural education and transport infrastructure can help farmers to increase cocoa income in Kyela District.