fundamentals of cooperative on history

Jo B. Bitonio

CDA Dagupan Extension Office

Rochdale PioneersIn modern form, cooperatives date from 1844, then a group of 28 impoverished weavers of Rochdale, England, founded a mutual-aid society, called the Rochdale Society of Equitable Pioneers.

Robert OwenOWEN first cooperative theorist and credited with inspiring the Rochdale Pioneers, who in 1844 began the cooperative movement at Rochdale, Lancashire

Although Owen inspired the cooperative movement, others –such as– Dr William King took his ideas and made them more workable and practical.

King believed in starting small, and realized that the working classes would need to set up cooperatives for themselves, so he saw his role as one of instruction.

Dr. William King (1786–1865)

It was here that the first co-operative store was opened.

Cooperatives were borne out of the free market economy and the many failures and injustices it has generated. The very first documented cooperative was in fact a reaction to the abuses of capitalism and it can be traced back to 1844 in Rochdale, England where a group of 28 weavers (27 males and 1 female) formed the Rochdale Society of Equitable Pioneers October 24,1844.

The Rochdale Pioneers Museum is housed in the building where the Rochdale Equitable Pioneers Society started trading on 21 December 1844. The museum is regarded as the birthplace of the modern co-operative movement

Robert Owen Scotland

William King UK

The Rochdale Pioneers Great Britain

Charles Fourier France

Charles Gide France

Beatrice Webb UK

Friedrich Raiffeisen Germany

Key Theorists

UK, France, Germany, Belgium, Austria, Italy, Denmark,Finland, Norway, and Sweden.

Cooperatives are playing an increasingly important role worldwide in facilitating job creation, economic growth and social development. Ranging from small-scale to multi-million dollar businesses across the globe;

Cooperatives are now venturing into new fields of activity, such as information and communication technology, tourism and cultural industries.

Global Significance of Cooperatives

They have historically emerged out of the need to provide goods and services not accessible from the public sector and conventional businesses. As such needs expand and become increasingly complex, cooperatives find more space to meet these needs, providing services while advancing livelihoods and creating jobs in the process.

Cooperatives exist in all sectors of the economy around the world, and while they are commercial organizations, they operate within a broader set of values and principles, not only aiming to generate profit.

7 Billion (2011) According to the United Nations, world population reached 7 Billion on October 31, 2011. The US Census Bureau made a lower estimate, for which the 7 billion mark was only reached on March 12, 2012.

The country with the largest number of individual members indirectly represented by the Alliance is the United States with 256 million members. In Asia, India following next behind the US with 93.7 million individual members. And then Japan with 77 million individual members.

The fourth largest number of members is in Iran with 36.9 million individual members.

All in all, five of the top ten countries, by membership, that the Alliance represents -are in Asia.

256 M

93.7 M

77 M

36.9 M

The world’s largest 300 co-operatives and

mutuals have grown their turnover by 7.20

per cent to USD $2.53tn according to the

2016 edition of the World Cooperative

Monitor WCM)

https://www.uk.coop/newsroom/worlds-top-300-co-operatives-increase-

turnover-253-trillion

Employment

Cooperation in a changing

world of work: Exploring the

role of cooperatives in the

future of work

World Cooperative Movement

it is estimated that cooperatives

employ some 250 million people.

Insurance & Mutuals 39%; Agri and food industries 32%; wholesale & retail trade 19%; Banking and Financial services 6%; Industry and Utilities 2%; Health & social care 1%

Hybrid Cooperatives

Hybrid cooperatives are defined by the ICA as “a cooperative that has issued equity shares to non member investors” (ICA 2015, p. 100). We here consider a broader approach, as a substantial challenge for cooperatives is the discussions around “hybridized forms of governance, where there may seem to be an appearance of autonomy, whilst control is continually conferred to the same actors” (Roelants et al. 2009, p. 73).

To the GDP of the world’s ninth largest economy

Source: ICA:2010

Isomorphization has two distinctive features:

the alignment of cooperatives on capitalist

enterprises and the process which concerns

enterprises formally constituted and incorporated in

a legal form different from cooperative status that

tend to operate according to some cooperative

principles. According to the ICA, it is important for

cooperatives themselves to resist any tendency to

mimic investor-owned enterprises in operational,

management and governance practices which do

not reflect the distinctiveness of cooperatives”

Isomorphization

A similar idea was pointed out as the

“degeneration thesis”: market pressures

tend, over the course of time, to lead to

cooperatives becoming similar to other

kinds of enterprise, particularly capitalist

enterprise (Vienney 1980; Cornforth et al.

1988; Sommerville 2007).

Isomorphization

False CooperativeAs they do not voluntarily comply with the

cooperative principles or do not follow the principles at all, false cooperatives are entities which try to elude more restrictive rules without necessarily being moved by any cooperative ideal. The issue of what is also called “pseudo cooperatives” (Roelants et al. 2014, p. 111) is closely related to labour, in particular the compliance with labour standards.

False CooperativeThe ILO recommendation No. 193 emphasises

the need to “ensure that cooperatives are not set up for, or used for, non-compliance with labour law, or used to establish disguised labour relationships”. Hence, national policies are invited to ensure that labour legislation is applied in all cooperatives and combat pseudo cooperatives that violate workers’ rights.

Rural Credit Bill

1907 1915Rural Credit ActGovernment

Initiated

1919

Grant loans to Credit Associations

1927Coop Marketing LawsPA 3425

1938

Strengthen Cooperatives

P.A. 3872

PA 3425 was

amended by PA 3872 provided incorporation of FACOMA

Early Cooperative Efforts (1906-1940)

1938Church Initiated Credit

Union in Vigan

P.A. 3425,

Common Wealth Act 565

Gen, Basic Cooperative

Law

1940Government Initiated

War Years (1941-45)

The Japanese Military Administrative used cooperatives

primarily as outlets for consumer goods and as mechanisms

to encourage local food production. Virtually all of the

estimated 5,000 cooperatives established during this period

were destroyed during the ensuing liberation.

Reconstruction Period 1945-1950

National Cooperative Administration

On November 1, 1945 the

National Assembly re-enacted

(C.A. 713) the National

Cooperatives Administration

(NCA).

In October 1947, Republic

Act No. 51 resulted in the

conversion of the NCA into

the National Cooperatives

and Small Business

Corporation (NCSBC).

in November 1950, the National Cooperatives and

Small Business Corporation (NCSBC) was abolished

and replaced by the Cooperatives Administration

Office (CAO), which operated under the Department

of Commerce and Industry (Executive Order No.

364, Series of 1950).

1960

1945

1947

Expansion of Cooperativism inthe Philippines (1950-1969)

1952

RA 2023Non AgriculturalCooperative law

In 1969 the Code of

Agrarian Reform

(Rep Act No. 6389

1952

RA 821 Farmers Cooperative Marketing

Government Initiated

1963

Philippine National

Cooperative Bank

Church Sponsored

1967

RA No. 821 known asthe Agricultural Credit and Credit Cooperative Financing Act

1952

Philippines (R.A 6389) Code of Agrarian Reform


1952

RA 2023Non AgriculturalCooperative law

In 1969 the Code of

Agrarian Reform

(Rep Act No. 6389

1952

RA 821 Farmers Cooperative MarketingGovernment

Initiated

RA No. 821 known asthe Agricultural Credit and Credit Cooperative Financing Act

1952

The Rural Banking Act (R.A.

720), passed in June of 1952,

Philippine National Cooperative Bank

Republic Act 821 also

established the Agricultural

Credit and Cooperative

Financing Administration

(ACCFA), and transferred to it,

from the CAO, responsibility for

the promotion, organization and

supervision of FACOMAs.

1953

In 1963, the Revised Barrio

Charter Act allowed for the

promotion of cooperatives at the

barrio-level. The Presidential

Arm on Community

Development (PACD) assisted

in helping to develop these

barrio cooperatives.

In June 1957, Congress

enacted a major piece of

cooperative legislation, known

as Philippine Non-Agricultural

Cooperatives (R.A. 2023). This

fundamental Act law governed

all types of nonagricultural

cooperatives


The Electrification Administration in June

Act (R.A. 2717) was passed into law

1960. The law provided for the supply

of cheap and dependable electric power

to encourage agricultural and industrial

development. also It empowered the

Electrification Administration (created by

the law)

In 1962 Congress passed

Republic Act No. 3470, known as

the National Industry Development

Act. This Law encouraged the

development of producers'

marketing cooperatives within the

country.


In July 1969, Republic Act No.

6038 created the National

Electrification Administration,

charging it with the responsibility for

developIng rural electrification

throughout the country utilizing rural

electric cooperatives, which in turn it

was responsible for organizing,

registering and supervising.

Also in 1963, the enactment of

the Agricultural Land Reform

Code (R.A. 7 3844) led to the

creation of the Land Authority,

Land Bank, Agricultural

Productivity Commission, and

reorganized the ACCFA into the

Agricultural Credit Administration

(ACA).

Social and Economic

Malaise (1969-1973)

In August 1969 strengthening of cooperatives as

strategic vehicles for national development. President

Marcos declared, "we shall need to elevate

cooperatives into an ideology ....an ideology of change

and development; an ideology of social reform and

human reformation."

Presidential Decree No. 27 was issued in October

1972 declaring land reform in rice and corn areas and

requiring farmer beneficiaries to join barrio

cooperatives which were to be established and were to

serve as guarantors for land payments under the

reform.

Cooperatives Under the 1973

Constitution (1973-1986)

On April 14, 1973 President Marcos issued a decree on

"Strengthening the Cooperative Movement" (P.D. 175).

Presidential Decree No. 175 declared it to be the "policy

of the state to foster the creation and growth of

cooperatives as a means of increasing income and

purchasing power of the low-income sector of the

population in order to attain a more equitable distribution

of income and wealth."

On July 9, 1973, Letter of Implementation President No. 23 was

issued by the Strengthening which set forth the regulations for

implementing the decree on the Cooperative Movement. In all,

65 separate regulations were contained in this instruction,

includ

P.D. No. 175 - credit, consumer, service,

marketing, producer, AMC, CRB, SN and

other cooperatives

P.D. No. 269 - electric cooperatives 3)

P.D. no. 775 - sugar cooperatives 4)

Executive Order No. 898 - transport

cooperatives

• Amended the Coop Code

promulgated in 1990 (RA6938);

• Discussed in four (4) Congresses

(starting the 11th Congress up to

the 14th) spanning over ten (10)

years;

• Approved by the Bicameral

Committee on November 18,2008;

• Signed into law last February 17,

2009

Current Status

Government Initiated

RA 9520

REVISED IRR OF R.A. 9520 PROMULGATED BY CDA FINALLY CONFIRMED BY THE JOCC

The Cooperative Development Authority scored a landmark victory with the signing of the Revised Rules and Regulations Implementing Certain and Special Provisions (IRR) of the Philippine Cooperative Code of 2008, otherwise known as R.A. 9520, on March 18, 2015 by Senator Manuel M. Lapid, Chair, Senate Committee on Cooperatives, and Cong. Cresente C. Paez, Chair, House Committee on Cooperatives, at the Legend Hotel, Manila.

Joint Oversight on Coop Committee

Co-operatives have been seen for a long time as important economic actors in the Philippines, having recently celebrated their centennial (1915-2015)

Co-operatives are well recognised in law; their promotion by a state agency was written into the constitution in 1987, and they have their own up to date Cooperative Code, amended in 2008.

They have been the ‘policy instrument of the government in promoting social justice and economic development’, which means they have had favoured status in economic and social policy. As in other Asian countries where governments have sponsored a large co-operative sector (Castillo and Castillo (2017) p1

201714,000,000 Members

1.3487 %

Types of Coop

under the Code

19

MC created

additional 4

coops

Based on AFS FY 2015

12

NCR

4

3

3

3

2

2

3

2

1

6

3

1

CAR 31 42 33 34 256 27 38 29 1

10 611 312 1

NCR 11CARAGAARMM 44

Category of Cooperatives

434 (4.6%) Large1455 (15.4%) Medium2656 (28.2%) Small4887 (51.8%) Micro9432 (100%)

Total Assets by Classification per Region

2015 data of encoded reports

Creating Co-operative Economics" focuses on the concept of “new economy”

Cooperatives: Part of the Solution

Change Agents

Ambassador, missionary,

transformer, steward

Role of CDS-IIs

fundamentals of cooperative on history

Government & Nonprofit