COOPERATIVE IN PHILIPPINES

Based on available sources, notably the Cooperative Development Authority, tracing the history of Philippine cooperative movement would not be complete without mentioning the name of Dr. Jose P. Rizal who, in his travels to Europe in the latter part of the 19th century, was impressed with the success of a new economic movement which transformed the economic and social life of the Europeans. After his side trip to Sandakan, Borneo in 1892, Rizal requested Governor General Despujol to allow him to move with some relatives and friends to that place and establish therein a colony under the cooperative production and marketing plan of Robert Owen, who is acknowledged as the father of world cooperation. Instead, he was arrested for treason and banished to Dapitan, Zamboanga del Norte. In Dapitan, Rizal had his ideas in cooperation partially fulfilled. He put up a school for the poor community on a purely cooperative basis. He also established a cooperative store with the help of his pupils. One noteworthy group organized by Rizal was the La Sociedad de los Abacaleros (Society of Abaca Producers). This functioned for only one year. Rizal returned the members share capital without any loss.

Another name worthy to mention is Teodoro Sandiko, who in his travels in Europe, must have had a close contact with the cooperative movement in Germany where he came across with the Raiffeisen movement. He was very much impressed by this type of cooperative and he looked forward for an opportunity to have it introduced here in the Philippines. As destiny might have its choice, Sandiko had his chance when he was appointed one of the early governors when Civil Government, under the Americans, was established.

As soon as Civil Government was established, Filipino participation in government was encouraged. Teodoro Sandiko, then governor of Bulacan, prepared a bill patterned after the Raiffeisen type of credit union and had Rep. Albert Barreto of Zambales sponsor it in the lower House of Congress. The principal aim of this bill was to protect and develop the agricultural interest of the country. When the Barreto sponsored bill was presented it readily obtained unanimous approval on January 20, 1908. The Philippine Commission however, turned it down.

Undaunted by this defeat the sponsors of the bill again put it through in the Second Philippine Legislature. This time it was sponsored in the Lower House by Rep. Rafael Corpuz who succeeded Rep. Barreto from Zambales. The bill was ably presented in both Houses and it was finally passed into law on February 11, 1914 and became Act 2508. When this Act was finally made into law, Gov. Sandiko earned the title of Father of Cooperation in this country.

The administration of the Rural Credit Law was entrusted to the Bureau of Agriculture. The first rural credit association that was organized under this Law was the Agricultural Credit Cooperative Association of Cabanatuan, Nueva Ecija. It was formed on October 18,1916. With this initial organization, farmers in the different provinces were organized. At the end of 1926 there were 544 rural credit cooperatives organized in the 42 provinces and by 1930 there were 571 associations formed all over the country. In 1935, however, about 90% of these cooperatives were inactive with no funds left in their treasury. The experiment on rural financing, through cooperatives was a failure. In the same year of 1916, the first Consumers Cooperative was organized at the College of Agriculture, Los Baños, Laguna.

As soon as the organization of rural credit cooperatives was in full swing, The Cooperative Marketing Law (Act 2425) was enacted and approved on December 9, 1927. The rural credit associations were designed to help finance the productive efforts of the farmers. In order to provide incentives to the farmers to produce more, an efficient machinery for the profitable marketing of their products should be provided. Wherever rural credit associations were organized cooperative marketing societies were also designed to be organized. In 1938, the first Credit Union was organized in Vigan, Ilocos, Sur. The apparent weakness of the rural credit cooperatives, however, failed the enthusiasm of farmers to organize themselves into cooperative marketing associations. By 1939 only 164 societies were actually organized with a total membership of around 5,000 farmers. With this number only 35 reported their sale of products to the Bureau of Commerce. The number of associations reporting indicated that only 20% of the organized associations were active. Amidst this situation, Commonwealth Act No. 565 or the Cooperative Law was passed in 1940 effecting legal sanction for the organization of Credit and Consumers Cooperative.

In recognition of the strategic position occupied by our farmers in the social structure and economic development of the country, the Congress of the Philippines in 1952 enacted Republic Act 821. This law established a system of liberal credit which is specially designed to meet the needs of the small farmer. It also created an administrative agency known as the Agricultural Credit and Cooperative Financing Administration (ACCFA). Through ACCFA, the government organized and financed Farmers’ Cooperative Marketing Associations (FACOMAs) by providing collateral free loans funded by the US Agency for International Development (USAID). By 1957, there were 600 FACOMAS. Provincial as well as national federations of FACOMA were organized. To implement the great task of rural financing, four general and interrelated objectives of the law are set forth as follows:

• To assist small farmers in securing liberal credit.
• To promote the effective groupings of farmers into cooperative associations.
• To establish an orderly and systematic marketing machinery for, and controlled by, the small farmers.
• To place agriculture on a basis of economic equality with other industries.

In 1957, RA No. 2023, otherwise known as the Philippine Non-Agricultural Cooperative Act, was passed by Congress which enabled the people in developing their enterprises on a cooperative basis.

In 1960, the Agricultural Credit Cooperative Institute (ACCI) was then established.

Three years later, RA No. 3844 or the Agricultural Land Reform Code was enacted. ACCFA was organized into Agricultural Credit Administration (ACA).The Land Bank of the Philippines was also established during the same year. In 1969, the Agrarian Reform Code was passed, mandating that coops be utilized as primary conduits for credit, supply and marketing services to agrarian reform beneficiaries.

During the Martial Law, Presidential Decree No. 2 or the Agrarian Reform Decree declared the entire country as an agrarian reform area. Under the Land Reform Program, the tenant-farmers were obliged to compulsory join a pre-cooperative organization called Samahang Nayon. Benefits would include the right to borrow funds from government banks and the assurance of being supplied with farm inputs. Subsequently, fully fledged cooperatives of at least ten Samahang Nayons called Kilusang Bayan were organized. Federations of cooperatives were then formed.

In 1973, PD No. 175, L.O.I. 23 was promulgated. This was an Act to strengthen the Cooperative Movement, consolidated the different Cooperative laws, provided a sound basis for a truly systematic cooperative program and placed the responsibility of initiating, promoting organizing, supervising and developing the cooperatives under one government agency, the Bureau of Cooperatives Development under the Department of Local Government and Community Development.

In May 1980, under EO 595, the Bureau of Cooperatives Development under the Ministry of Local Government and Community Development was transferred to the Ministry of Agriculture.

Executive Order No. 116 dated January 30, 1987 established the Bureau of Agricultural Cooperatives Development in the Ministry of Agriculture and Food, the function of which was to formulate an integrated system for development and evaluation of agricultural cooperatives; provide assistance in the establishment of agricultural cooperatives in the rural communities and; evolve a program to promote the economic viability of agricultural cooperatives.

In 1990, Republic Act No. 6938, the Cooperative Code of the Philippines and RA 6939 creating the Cooperative Development Authority (CDA) were signed into law on March 10, 1990. RA 6938 rationalizes and unifies all cooperative laws while the CDA is created to promote the viability and growth of Cooperatives.

In 1993, the National Cooperative Movement (NCM) was organized and then the organization of the Philippine Cooperative Center (PCC) the following year. In 1998, the Cooperative-National Confederation of Cooperatives (COOP-NATCCO) Network Party formed by members of NATTCO landed a seat in the House of Representatives after garnering over 2% of the votes of partylist elections. The partylist also won another seat in the 2001, 2004 and 2007 elections thereby enabling the cooperative movement to have a voice in the halls of Congress, particularly in the efforts to amend the cooperative code. In 2009, the partlylist was accorded another slot in Congress with the decision of the Supreme Court. In recent May 10, 2010 elections, the partylist is poised to win two seats and still awaiting for the final canvass and still hoping to get a third seat.

Republic Act No. 9520 or the Philippine Cooperative Code of 2008 was signed into law last February 17, 2009. The new law amending RA 6938 was passed to meet the challenges of the global economic situation and the advent of the age of information technology. Moreover, the new cooperative code is expected to strengthen the thousands of cooperatives in the country and enable the system to contribute better to the country’s economic growth.

Despite the various laws passed and government interventions being implemented, early cooperatives in the Philippines was generally a failure. Filipino economists and students of cooperatives in this country have often attributed the failure of cooperative societies in this country to the following causes:

• Incompetent management.
• Lack of proper understanding of the principles, practices, true aims, and purposes of cooperative associations.
• Improper use of credits by the borrowers, who, instead of using money borrowed for production, spent it for fiestas or luxuries.
• Defective securities.
• Political interference particularly in the collection of overdue accounts.
• Lack of compensation of officers.
• Inadequate character and moral responsibility in handling the other fellow’s money.
• Lack of adequate safeguard against unscrupulous officers who took advantage of their position to grant loans to themselves and their compadres which later proved disastrous to the system.
• The dominance of the individualistic attitude instead of the spirit of cooperation among the people.
• Inability of cooperatives to secure adequate capital.
• Their dependence on alien suppliers and distributors.
• Ineffectiveness of the government in the promotion of cooperative organizations.
• Inadequate marketing facilities.

Considering the experiences of similar societies in other countries, however, the fundamental cause of failure in a cooperative enterprise is the lack of proper understanding of the principles and true aims of cooperative associations, and the non-adherence to them in actual operation of cooperative enterprises.

Despite the sad experience of the Philippine cooperative movement, there are a number of Philippine cooperatives who flourished and succeeded in their endeavors and their stories provide inspiration to the starting and growing cooperatives in the country.

Cooperative in Africa

South Africa has a mixed economy, the largest in Africa in terms of both nominal GDP (at $375.944 billion) and GDP at purchasing power parity (at $608.804 billion). It also has a relatively high GDP per capita compared to other countries in Sub-Saharan Africa ($11,750 at PPP as of 2012). Despite this, South Africa is still burdened by a relatively high rate of poverty and unemployment, and is also ranked in the top 10 countries in the world for income inequality, measured by the Gini coefficient. Unlike most of the world's poor countries, South Africa does not have a thriving informal economy; according to OECD estimates, only 15% of South African jobs are in the informal sector, compared with around half in Brazil and India and nearly three-quarters in Indonesia. The OECD attributes this difference to South Africa's widespread welfare system. World Bank research shows that South Africa has one of the widest gaps between per capital GNP versus its Human Development Index ranking, with only Botswana showing a larger gap.

After 1994 government policy brought down inflation, stabilised public finances, and some foreign capital was attracted, however growth was still subpar. From 2004 onward economic growth picked up significantly; both employment and capital formation increased.

South Africa is a popular tourist destination, and a substantial amount of revenue comes from tourism. Illegal immigrants are involved in informal trading.^[116] Many immigrants to South Africa continue to live in poor conditions, and the immigration policy has become increasingly restrictive since 1994.

Principal international trading partners of South Africa—besides other African countries—include Germany, the United States, China, Japan, the United Kingdom and Spain.

The South African agricultural industry contributes around 10% of formal employment, relatively low compared to other parts of Africa, as well as providing work for casual labourers and contributing around 2.6% of GDP for the nation. Due to the aridity of the land, only 13.5% can be used for crop production, and only 3% is considered high potential land.

In August 2013, South Africa was ranked as the top African Country of the Future by FDi magazine based on the country's economic potential, labour environment, cost-effectiveness, infrastructure, business friendliness, and Foreign direct investment Strategy.

The FSI ranks South Africa as the 36th safest tax haven in the world, ahead of the Philippines but behind the Bahamas.

History of cooperatives in the United States

18th century

Colonial era

The earliest mutual organization established in the British North American colonies was created in 1735 in Charleston, South Carolina, but was liquidated following a 1740 fire which gutted much of the city's buildings and had left the company unable to recoup the losses. The Philadelphia Contributionship mutual insurance company, founded by Benjamin Franklin in 1752, is the oldest continuing mutual insurance company in the continental United States.

19th century

The Boston Mechanics' and Laborers' Mutual Benefit Association was founded in 1845 as a mutual organization styled after the British Rochdale Pioneers.

20th century

By 1920, there were 2,600 consumer co-ops in the United States - all but 11 were general stores - and 80% were in towns with populations of less than 2,500. Combined sales volume for these stores was about $260 million USD.

Great Depression

Upton Sinclair's EPIC movement became one of the leading proponents for the establishment of self-help cooperatives in California during the Great Depression, as was Japanese pacifist Toyohiko Kagawa, who advocated for "brotherhood economics" as an alternative to communism and fascism on both sides of the Pacific. This advocacy for cooperatives, combined with then-president Franklin Roosevelt's New Deal, culminated in the establishment of cooperatives in Berkeley, California, Palo Alto, Eau Claire, Wisconsin, Hanover, New Hampshire, Hyde Park, Chicago, and Greenbelt, Maryland. While all these cooperatives lasted to at least their 50th anniversaries, the Consumers' Cooperative of Berkeley ultimately closed down, the Eau Claire and Palo Alto cooperatives scaled back their activities, and the Hanover, Hyde Park, and Greenbelt cooperatives have survived to this day.

Credit unions, in particular, were established throughout the United States and have remained one of the most visible and productive legacies of the New Deal period.

21st century

In the healthcare reform debate, health insurance cooperatives were, at one point, proposed as an alternative to the public option.

In 2009, the United Steelworkers signed an agreement with the Basque Country-based Mondragon Corporation in order to further the establishment and expansion of unionized worker cooperatives in North America.

The National Cooperative Business Association identifies over 29,000 cooperative businesses employing more than 2 million people and accounting for over $650 billion in annual revenue.

The Rochdale Society of Equitable Pioneers was a group of 28, around half were weavers in Rochdale, Lancashire, England, that was formed in 1844. As the mechanisation of the Industrial Revolution was forcing more and more skilled workers into poverty, these tradesmen decided to band together to open their own store selling food items they could not otherwise afford. With lessons from prior failed attempts at co-operation in mind, they designed the now famous Rochdale Principles, and over a period of four months they struggled to pool one £1 per person for a total of 28 pounds of capital. On 21 December 1844, they opened their store with a very meager selection of butter, sugar, flour, oatmeal and a few candles. Within three months, they expanded their selection to include tea and tobacco, and they were soon known for providing high quality, unadulterated goods. Ten years later, the British co-operative movement had grown to nearly 1,000 co-operatives.

The Archive for the Co-operative movement in Rochdale is held by Local Studies, Rochdale Boroughwide Cultural Trust.

Rochdale Pioneers traded independently until 1991, with name changes inspired by mergers with neighbouring co-operatives, as Pioneers from 1976, and Norwest Pioneers from 1982, based in Wythenshawe,Manchester by 1991. In 1991, then Norwest Co-operative Society transferred its engagements to United Co-operatives, that was run from Rochdale when it in turn transferred to the Manchester-based national hybrid society, The Co-operative Group, in 2007.

England

he largest and most recognised part of the UK movement are the many consumers' co-operatives. They are co-operative businesses run for the benefit of their customer members. Of these co-operatives, the largest sector is food retailing, though they have a significant presence in other sectors such as travel agencies and funeral directors. The late 20th and early 21st centuries have seen a gradual exit by these businesses from the non-food retailing market.

Many co-operatives (by convention known as co-operative societies) started out in a single village, town or city usually with just a single store. Here, members would be customers of the society's trading location and the society would reward these members with a proportion of any profits based on that member's spending with the society, or a dividend. This is a fundamental difference between a co-operative and a joint stock company. Most societies were small, and by 1900, there were 1,439 co-operatives covering virtually every area of the UK. Gradually, societies expanded and opened further stores or they would merge with a neighbouring society. Today, there is one dominant, national society, The Co-operative Group, a family of businesses led by its principles and owned by its members, with over six million members and 4,500 trading outlets. The family of businesses comprise food, travel, banking, insurance, pharmacy, funeral, legal services, investments, online shop, electrical and beds. Membership is open to everyone as long as they share The Co-operative’s values and principles. Every year members receive a share of the profits that they helped to create, based on the amount made in profits that year and the how much they had spent with any of its businesses.

The Co-operative Group is complemented by a number of large regional societies such as Midlands Co-op, the Midcounties Co-operative and Scotmid. However, many societies have remained with a single store such as Shepley Co-op, Coniston Co-op and Allendale Co-op.

The decline, through mergers, of single shop co-operatives, was reversed by two trends. Firstly, around 170 community owned shops were established since 1979, many of which are co-operatives. Secondly, the United States food co-operative movement was replicated in the UK: some of the independent food co-operatives established in the late 20th and early 21st centuries operate shops.