The cooperatives and the national development goals and agenda
1. Cooperative as Practical Vehicles for Poverty Alleviation Economic Growth And Equity
REPUBLIC ACT NO. 8425
AN ACT INSTITUTIONALIZING THE SOCIAL REFORM AND POVERTY ALLEVIATION
PROGRAM, CREATING FOR THE PURPOSE THE NATIONAL ANTI-POVERTY
COMMISSION, DEFINING ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES
RA 8425 divides the basic sectors into 14 main groupings:
Farmers and landless rural workers
Artisanal fisher folk
Urban poor
Indigenous people and cultural communities
Workers in formal labor and migrant workers
Workers in the informal sector
Women
Children
Youth and students
Senior citizens
Persons with disabilities
Victims of disasters and calamities
Non-governmental organizations
COOPERATIVES
"Cooperative" — Refers to a duly registered association of at least fifteen (15) persons,
majority of which are poor, having a common bond of interest, who voluntarily join
together to achieve a lawful common social and economic end. It is organized by the
members who equitably contribute the required share capital and accept a fair share of
the risks and benefits of their undertaking in accordance with the universally accepted
corporate principles and practices;
SOCIAL PROBLEMS
Corruption
POVERTY
Overpopulation
Child Abuse
Lack of adequate health services
Terrorism
Unemployment
2. TYPES OF POVERTY
ABSOLUTE POVERTY OR DESTITUTION
refers to the deprivation of basic human needs, which commonly includes food, water,
sanitation, clothing, shelter, health care and education.
RELATIVE POVERTY
defined contextually as economic inequality in the location or society in which people
live
CAUSES OF POVERTY
Overpopulation
Overpopulation is defined as the situation of having large numbers of people with too few
resources and too little space. Overpopulation can result from either a high population density
(the ratio of people to land area) or from low amounts of resources, or from both.
A high population density pressures the available resources in the country, as the resources can
only support a certain number of people.
Poverty can also depend on the country's mix of population density and agriculture productivity
High birth rates contribute to overpopulation in many developing countries. Children, especially
boys, are assets to many poor families because they provide labor, usually for farming.
Distribution of resources:
In many developing countries, the problems of poverty are massive and pervasive. In recent
decades most of these countries have tried to develop their economies with industry and
technology with varying levels of success. Many developing countries, however, lack essential
raw materials and the knowledge and skills gained through formal education and training.
Because these things are necessary for the development of industry,developing countries
generally must rely on trade with developed countries for manufactured goods, but they cannot
afford much.
According to reports, people’s incomes are not enough to cover the cost of their basic
necessities and provide them basic services such as water, electricity, transportation and
communication.
Lack of education:
Illiteracy and lack of education are common in poor countries. Governments of developing
countries often cannot afford to provide for good public schools, especially in rural areas. .
3. In countries with high populations, unemployment levels of only a few percentage points mean
that millions of working-age people cannot find work and earn an adequate income.
Because unemployment figures indicate only the number of people eligible to work who have no
job but are seeking employment, such figures are not necessarily an accurate indicator of the
number of people living in poverty. Other people may not be able to find enough work or may
earn wages too low to support themselves.
Environmental degradation:
Environmental degradation is the deterioration of the natural environment, including the
atmosphere, bodies of water, soil, and forests — is an important cause of poverty.
Environmental problems have led to shortages of food, clean water, materials for shelter, and
other essential resources.
People in developed countries, on the other hand, have technologies and conveniences such as
air and water filters, refined fuels, and industrially produced and stored foods to buffer
themselves from the effects of environmental degradation.
Economic trends:
Poverty in many developed countries can be linked to economic trends.
Changes in labor markets in developed countries have also contributed to increased poverty
levels. For instance, the number of relatively high-paying manufacturing jobs has declined, while
the demand for workers in service- and technology-related industries has increased.
Historically, people have learned the skills required for jobs that involve manual labor, such as
those in manufacturing, either on the job or through easily accessible school vocational
programs. As these jobs are replaced by service- and technology-related jobs—jobs that usually
require skills taught at the college level—people who cannot afford a college education find it
increasingly difficult to obtain well-paying work.
Reports have noted that poverty is also symptomatic a symptom of poor basic services, scarce
financial resources and low returns from natural wealth such as oil, gas, minerals and fisheries
while revenues from public investments and taxes are exposed to corruption and
embezzlement.
4. Economic
- High rate of unemployment
- Unemployment is rampant now that the global financial crisis has ravaged the world's
economy. With a higher number of unemployed people, crime rates in these cities will increase
as people grow desperate to survive. It is also believed, however, that some governments of the
world intentionally keep a "sufficient" number of people out of work as a replacement batch
when the need arrives.
- Unfair trade
High subsidies and protective tariffs for agriculture in the developed world drains the taxed
money and increases prices for consumers in the developed world, decreasing competition and
efficiency and preventing exports by more competitive agricultural and other sectors in the
developed world due to retaliatory trade barriers and undermining the very type of industry in
which developing countires do.
Corruption (Economically-wise)
Corruption often accompanies centralization of power, when leaders are not accountable to
those they serve. More directly, corruption inhibits development when leaders help themselves
to money that would otherwise be used for development projects.
Corruption, both in government and business, places heavy cost on society. Businesses should
enact, publicize and follow codes of conduct banning corruption on the part of their staff and
directors.
Effects
Malnutrition
The hunger situation is alarming.
Food insecurity is blamed for the fact that many preschool children are underweight and
malnourished. An economist pointed out that "inadequate food can adversely influence workers'
productivity."
The main reason why hunger is worsening is the people's lack of income to buy food.
Poor Economic growth
The poor remain poor because they cannot borrow against future earnings to invest in
education, skills, new crops, and entrepreneurial activities; they are cut off from economic
5. activity because many collective goods (such as property rights, public safety, and
infrastructure) are under-provided, and they lack information about market opportunities.
Child Labor
According to the National Statistics Office, 3.6 million Filipino children, aged 5-17, are child
laborers. When the parents just don't have enough money to make ends meet they usually force
their children out of school and send them to work out on the streets, haciendas or factories.
Earning money for their food and shelter became their sole purpose, no longer the education
that should have served to bring them a better future.
Observations: Effects
Bad living conditions
Because of poverty, many families are forced to occupy public and private lands without the
right to do so. And, because this land is not theirs, it tends to overcrowd. Because of
overcrowding, the environment usually becomes unsanitary and heightens the chances that
disease will spread.
Crime/ Theft
Due to the hardships in life caused by poverty, many people can’t even get enough money to
live. This causes them to do whatever it takes to be able to sustain their and their family’s need
even when it involves stealing.
COOPERATIVE AS PRACTICAL VEHICLES FOR POVERTY
Are cooperatives able to reduce poverty and if so, by which mechanism? What concrete
examples of poverty reduction exist? What are the success factors that help
these examples and what obstacles hinder these? What measures work and what
does not work?
What about Cooperatives and Sustainable Development Goals?
Cooperative enterprises are instrumental in providing opportunities for productive employment
as well as offering services such as health care, education, credit, improved infrastructure and
sustainable energy. They are guided by values of social dialogue and democracy, and are often
rooted in local communities, making them a sustainable option for achieving development.
6. The cooperative organization works as the independent variable in the model and
poverty reduction and business promotion function as the dependent variables. The
social positions, human conditions and the enabling environment are the intervening
variables that influence the relationship of the dependent and independent variables.
Cooperatives and Poverty Reduction
Poverty reduction has been at the top of the international development agenda since the
Second World War (Sachs 1997).
Cooperatives have been contributing to the achievement of that universal goal ever since.
Evidence from different regions around the world shows that cooperatives have an important
role to play in reducing poverty in local communities where they are embedded.
For Example in India, dairy cooperatives generate employment for 13.4 million rural
households. Cooperatives’ potential to contribute to poverty reduction is explained by the fact
that they are membership-based organizations owned by their users (Birchall 2004).
Women and youth are also choosing the cooperative form to start enterprises of their own, thus
creating new jobs and opportunities.
Since cooperatives are still the main channel for rural people to access financial services, get
lower cost inputs, storage, transport and get their products to market, they serve to secure
livelihoods and reduce poverty.
7. Cooperatives are one of the largest providers of microfinance services to poor people, allowing
them to access the financial support they need to improve their livelihoods. Cooperatives have
played and continue to play an important role worldwide in poverty reduction, facilitating the
construction of homes, the provision of agricultural loans, economic growth and social
development.
Cooperatives and Employment Creation
One of the major global concerns is the achievement of full and decent employment. All over the
world, unemployment is growing and there are fears that it will continue to increase in the next
few years due to the current financial crisis.
Cooperatives are major providers of employment in rural areas where private investors have no
or little interest and where agriculture is the main employment generator.
While agricultural cooperatives have played a central role in job creation in agricultural
production, processing, marketing, purchasing and sales, rural cooperatives have also boosted
employment in other sectors like financial services, energy, housing, tourism and handicrafts
(ILO 2008).
For example, over 257,000 jobs have been created by agricultural cooperatives in Japan’s rural
areas, and 65,215 jobs in the Philippines. Contrary to other forms of investment, cooperatives
are less likely to relocate to lower wage areas, but instead prefer to find innovative ways to
retain jobs and remain competitive (ILO 2007).
Recent research also shows that during the global financial crisis, financial cooperatives can
provide a credible alternative to the investment-owned banking system hence securing jobs and
creating new ones in the financial sector (Birchall 2013). With the ability to create and maintain
jobs, cooperatives have made considerable contributions to employment creation.
It is generally recognized that cooperatives respond effectively to the ever-changing needs of
people. For example, in response to the effects of globalization, people continue to choose
cooperatives to address their needs. In a number of countries, people are starting new
cooperative enterprises in such areas as social care and information technology.
The values of cooperation - equity, solidarity, self-help and mutual responsibility - are the
cornerstones of cooperatives and should be sustained so that cooperatives can continue to
respond with flexibility and innovation to changes and challenges posed by globalization
What Next?
In order to bring cooperatives’ voices into the post-2015 development agenda process, the
International Labour Organization’s Cooperatives Unit, in collaboration with the International
8. Cooperative Alliance (ICA), the United Nations Research Institute for Social Development
(UNRISD) and other partners has launched an initiative on the contribution of cooperatives to
sustainable development.
THE ROLE OF COOPERATIVES IN ECONOMIC GROWTH
In his message on the occasion of the International Day of Cooperatives, the Secretary-General
observed that:
"Cooperatives are at work in almost every country and economic sector.
More than 760 million people around the world are engaged in the cooperative movement.
As business organization, cooperatives contribute to economic development, generating more
than 100 million jobs and securing the livelihoods of nearly a quarter the world’s population.
Cooperatives provide an important channel for bridging market values and human values.
Within the UN system, the ILO is responsible for the largest and most diversified programme for
the promotion of cooperatives.
Viable and self-reliant cooperatives formed by producers, consumers, workers and business
people worldwide have demonstrated their enormous potential for creating and consolidating
employment opportunities, empowering people, providing protection and alleviating poverty.
The ILO technical assistance programme for cooperative development focuses on policy and
legal advice, capacity-building through human resource development, poverty alleviation
through self-help, alternative delivery mechanisms for social services, and a special regional
programme for indigenous and tribal peoples.
COOPERATIVE FOR EQUITY
Some definitions and differences of Equity
• it is what is left over after all of the debt and other obligations (liabilities) of the company
have been paid
• is what belongs to the owner(s) of a firm and theoretically includes all that the owners
have invested in the company over time, including funds used to start the company,
annual earnings that have been retained in the company over the years, and any
9. ongoing investments that have been made to replace and improve the organization's
assets. It also sometimes includes intangible assets such as brand name or good will
• An ownership interest in a corporation in the form of common stock or preferred stock.
• Total assets minus total liabilities; here also called shareholder's equity or net worth or
book value.
In the context of a futures trading account, it is the value of the securities in the account,
assuming that the account is liquidated at the going price. In the context of a brokerage account,
it is the net value of the account, i.e. the value of securities in the account less any margin
requirements.
Key Differences in Business Structure
Cooperative
Corporation
C Cooperative Sole proprietorship Non Profit
Organization
Who are the
owners?
Members One or more
stockholders
Individual No ownership
What are the
business
purpose?
To meet member
needs to goods and
services
To earn a return on
owner investments
To provide owner
employment a return
on owner’s
investments
To provide services
or information
How is the
business
financed?
Stock/shares to
members, and
sometimes outside
investors; retained
profits
Sale of stock;
retained profits
Proprietor’s
investment; retained
profits
Grants, individual
contributions, fees
for services
Who
receives
profit?
Members in
proportion to use;
preferred
stockholders in
proportion to
investment, up to 8%
Stockholders in
proportion to
investment
Proprietor Retained within the
organization
What is
owner legal
liability?
Limited to members Limited to
stockholders’
investments
Unlimited for
proprietor
Limited to assets of
the organization
10. Education, Cultural Upliftment and Delivery of Basic Social Services through Cooperative
EDUCATION
What is Cooperative Education and its Purpose?
• Cooperative Education is a program that involves regularly scheduled employment,
giving the student an opportunity to experience theory in practice while developing
competencies through supervised training on a job related to his/her occupational or
educational objective.
• The purpose of the work experience program is to integrate related academic
preparation with practical work experience, thereby giving the student a better insight
into his/her potential career field.
Cooperative Learning
• as “the instructional use of small groups so that students work together to maximize their
own and each other’s learning
• is claimed to promote a positive attitude toward the subject matter and thus
increase knowledge retention
• cooperative learning is a process meant to facilitate the accomplishment of a specific
end product or goal through people working together in groups.
What are the benefits of Cooperative Education?
The Student
Earns college credit for working in the job field related to his/her career or educational goals
Has the opportunity to earn money while learning
Learns what work in the related career field is all about
Increases employability and earning power
Increases the potential to advance within the career field
Provides a direct relationship between the classroom and employment
The Employer
Provides an opportunity to know potential career employees
Creates a resource of trained personnel
Reduces the cost of employee turnover by having trained personnel available
Makes a unique contribution to the extension of the community's educational facilities
Has the opportunity to hire highly motivated students whose career objectives are directly
related to the job
The College
Provides the opportunity for the college to respond to the specific needs of the community
Brings the college in closer contact with the community
Gains additional insights to the classroom situation as a result of the cooperative education
student maturing on the job
Obtains the ability to use community facilities to provide work experience not available at the
college
http://www.palomar.edu/cooped/
11. SOCIO-ECONOMIC AND CULTURAL UPLIFTMENT IN RURAL ENVIRONMENT (SECURE)
is an organisation of social workers committed to the cause of the marginalised & vulnerable
sections of the society.
Universalisation of Elementary Education & Promotion of Child Rights
Strengthening of Local Body Governance
Improvement of Livelihoods through micro credit and micro-enterprises
Participatory Natural Resource Management
Promotion of health sustainability and prevention of HIV /AIDS
Sustainable agriculture
Improving livelihoods by strengthening Traditional Milk Marketing sector
Relief and rehabilitation during disasters
INDIAN FARMERS FERTILISER COOP LTD.(IFFCO)
: CONTRIBUTION TOWARDS LOCAL DEVELOPMENT
LOCAL DEVELOPMENT INITIATIVES BY IFFCO
IFFCO SUPPORTS LOCAL DEVELOPMENT THROUGH
AGRICULTURAL DEVELOPMENT
INFRASTRUCTURE DEVELOPMENT
SOCIAL DEVELOPMENT
ENTREPRENEURIAL DEVELOPMENT
AGRICULTURAL DEVELOPMENT
ENHANCING CROP PRODUCTIVITY
“SAVE THE SOIL CAMPAIGN” FOCUSSING ON REJUVENATION OF SOIL HEALTH
- Reclamation of Soil
- Promotion of organic manure (Green Manure, Biofertiliser, Compost Formation)
- Farm Implements for Innovative Farming
(Rotavator, Seed Drill, Sugarcane Thrasher etc.)
- Promotion of Balanced Nutrient Application
TRANSFER OF MODERN AGRICULTURETECHNOLOGY
farmers meetings
on-farm demonstrations
crop seminars
soil testing campaigns
FIELD DAYS
12. INFRASTRUCTURE DEVELOPMENT
IN AGRICULTURE SECTOR
construction of warehouses and storage-cum-community centre.
village adoption programme & integrated rural development projects (irdp)
IN NON AGRICULTURE SECTOR
construction of residential houses for the poors
(gujarat earthquake victims, tsunami victims in india & nearby countries)
‰ construction of roads
‰ providing drinking water facilities
‰ assistance to school and colleges for building their
SOCIAL DEVELOPMENT
relief and rehabilitation to the victims in the event of natural calamities.(flood, drought &
supply of fodder in drought areas)
financial assistance for the medical treatment of needy farmers.
medical & veterinary check- up camps
blood donation camps and assistance to red cross society
assistance/scholarship to the brilliant students
Cooperative As Democracy as Responsible Governance at Work
COOPERATIVE AS DEMOCRACY
The workers are defined as the members and owners of cooperatives. These member-owners
are entitled to vote and to a share of the profits of a business.
Worker-owned
Workers own the business together. They usually invest with a buy-in amount of money
when they begin working.
Worker-controlled
decisions are made democratically, by the people who do the work instead of by one
person or group people that holds all the power.
* an elected board of directors
* elected managers
* management job roles
* no management at all
13. * decisions made by consensus (everyone agrees)
* decisions made by majority vote
* any combination of the above.
What is cooperative?
A co-operative is an autonomous association of persons united voluntarily to meet their
common economic, social, and cultural needs and aspirations through a jointly-owned
and democratically-controlled enterprise.
Cooperative values
Self-help
Self-responsibility
Democracy
Equality
Equity
solidarity
Ethical Values
Honesty
Openness
Social responsibility
Caring for others
Cooperative Principle
Voluntary and Open Membership
Democratic Member Control
Member Economic Participation
Autonomy and Independence
Education, Training and Information
Co-operation among Co-operatives
Concern for Community
14. COOPERATIVE AS RESPONSIBLE GOVERNANCE AT WORK
• is a pure democratic self-governance system of managing a cooperative entity based on
and in complying with the principles, values and philosophy of cooperation through the
appropriate and effective organizational structure with conducive culture and ethical
climate.
• Board of Directors
– Directors must stay clear of conflicts of interest, so that their decisions serve the
needs of the entire cooperative, rather than specific groups within the business.
– Board-Management Relations
– The management of a cooperative is hired to carry out the objectives and policies
adopted by the board.
– Members
– Members control the cooperative by democratically electing member
representatives to a board of directors.
– This member support keeps the co-op economically healthy, and allows it to
adapt to changing member needs.
• Three Subsidiary Boards
• Co-operative Food
• The Co-operative Banking Group
• Co-operative Specialist Businesses.
The Group Board is responsible for the long term success of the Group by:
– Ensuring
– Determining
– Overseeing
– Monitoring
– Setting
• Cooperative Governance Framework
• Cooperative Governance Framework
• Four Pillars of Cooperative Governance
• Four Pillars of Cooperative Governance
• Teaming
– Successfully working together to achieve common purpose.
• Accountable Empowerment.
– Successfully empowering people while at the same time holding them
accountable for the power granted.
• Strategic Leadership
– Successfully articulating the cooperative’s direction/purpose and setting the
organization up for movement in this direction.
• Democracy
– Successfully practicing, protecting, promoting and perpetuating our healthy
democracies.
15. The Role of Cooperative In Environmental Protection
Role of a Business in Community:
Take essential steps to maintain proper ecological balance
Prevent environmental degradation caused due to pollution
Take initiative in the conservation of scare resources
Contribute in the development of socially-backward areas
Make contribution to promote education and population control
Improve the efficiency of business operation
Contribute help in events of disasters
Provide health care facilities for local community
Provide equal opportunity of employment
Make provisions for social accountability
Maintain good relationship between business and society
Cooperate with the government
Corporate social Responsibility
Corporate social responsibility may also be referred to as "corporate citizenship" and can
involve incurring short-term costs that do not provide an immediate financial benefit to the
company, but instead promote positive social and environmental change.
7th Principle: Concern for Community
Cooperatives work for sustainable development of their communities through policies approved
by their members.
Cooperative Ethical Values
Openness
Honesty
Social Responsibility
Caring for Others