masteral thesis on cooperative governance
DESCRIPTION
Cooperative Governance & Poverty AlleviationTRANSCRIPT
Edwin BR. Gbargaye
A masteral thesis of Pangasinan State University, Urdaneta City, March 2010
Presented by: Josefina B. Bitonio Acting Director- CDA
Poverty reduction is one of the major affairs of the Philippine government.
The integration of governance into cooperative programs emphasizes the significant role of cooperatives as public service delivery system for poverty reduction and rural development.
According to Bautista (2002), governance is one aspect of poverty reduction that affects the different phases of program implementation. In his view, good governance involves the design, processes and strategies of implementing and managing cooperative program for poverty reduction and rural development.
Scholars and development institutions argue that good governance is not only an essential component but also a pre-condition for development. That is, development cannot exist without good governance ( Leftwich 1993, Boeninger 1993, UNDP 1997, ADB 2003).
Thus, good governance is necessary in the planning and implementation of local, regional and national development programs that focus on poverty reduction initiatives for the impoverished sectors in the rural areas-the landless, indigenous peoples and the marginal farmers and fishermen
Good governance provides a working framework and doable strategies for implementing cooperative program as a strategy for poverty reduction and rural development. Its desirable outcomes focus on the needs-based and equity-laden delivery of pertinent public services to the socially targeted beneficiaries and the profit able cooperative operations of the civil society and business sectors.
Cooperatives have been the forefront of people empowerment. Since the enactment of the cooperative Code of the Philippines in 1990, the promotional effort of public and private sectors alike created a momentum that saw the flowering of cooperatives in various productive facets of the economy.
Cooperatives are in the savings mobilization, provision of credit, production, processing and marketing of agri-based products, manufacturing, food service, transport, hospital and health services, housing and insurance (Nito, 1998).
From RA 6938 six (6) types: Credit, Consumers, Marketing, Producer, Service, and Multi Purpose
To RA 9520 18 types namely: Credit, Consumers, Marketing, Producer, Service, Multi Purpose, Advocacy Cooperative, Agrarian Reform Cooperative, Cooperative Bank, Dairy Cooperative, Education Cooperative, Electric Cooperative, Financial Service Cooperative, Fishermen Cooperative, Health Services Cooperative, Housing Cooperative, Transport Cooperative, Water Service Cooperative Workers Cooperative, and others
The $1, $1.25,and $2 a day benchmarks are used to measure absolute consumption poverty across countries.
In August 2008, the World Bank revised their global poverty estimate benchmark upwards from $1 a day to $1.25 a day. Using this current benchmark 1.4 billion people are subsisting below the poverty line in difference to the 984 million with the older measure of $1 a day in 2004. The United Nations Development Programme (UNDP) estimates that an additional 1.7 billion people might be living on $2 a day by 2015 (UNDP, 2005)
Given that the reduction in global poverty has been rather sluggish, even the promoters of cooperative do not disagree that cooperative alone is enough to reduce poverty.
For the alarming incidence of poverty in the world to be reduced, governments, donors, NGOs and individuals must be able to clearly identify the policies and initiatives that work and how they can be tailored to better serve the intended beneficiaries.
This can only be achieved through the right measurement techniques and possibly firsthand account by the poor themselves.
Therefore, reducing poverty is a call to action that we all must heed because while there has been some improvement at the global level, wide discrepancies and unevenness persists among the various regions in the world.
Scope and Delimitation of the Study
The study was limited to the four cities of Pangasinan* Urdaneta City* Dagupan City* San Carlos City* Alaminos City
Characteristics: 1. savings and credit operation2. operating for 3 years and above3. with a minimum paid up capital of at least 1 million,
on their savings and credit operation4. Belonging to cooperative growth and development
(4th stage) and cooperative transition and transformation (5th stage) of development by Tayko, et al, 2004
Scope…
These cooperatives had been recognized and awarded by various institutions and organizations, both public and non-government sectors because of their contribution and exemplary performance not only to the cooperative sector but also to their respective communities in Pangasinan.
Statement of the Problem
1.What is the organizational profile of cooperatives in terms of :
a. date registered;b. articles of cooperation and by laws; c. number of employees;d. assets; e. membership;f. deposits; g. trainings conducted;h. services rendered;i. linkages; and j. core management team?
2. What governance model strengthens confidence in cooperatives relative to: a. traditional b. corporate c. democratic and d. eclectic?
3. What is the level of practice in governance activities of the officers in terms of: a. accountability b. transparency c. predictability and d. participation?
4. what are the services implemented by the cooperative in alleviating poverty of their members in terms of:
a. provision of credit b. employment generation c. educational assistance d. mutual aid fund e. health benefits f. community involvement?
5. What are the problems in cooperative governance along the following:
a. accountability; b. transparency; c. predictability; and d. participation?
Conceptual Framework
Fig. 1 Paradigms showing the schematic organization of the Study
Services of Cooperatives Addressing Poverty
a. Provision of creditb. Employmentc. Educational Assistanced. Mutual Aid Funde. Health Benefitsf. Member’s Benefitg. Community Involvement
Organization profile of cooperatives in the province four cities
adate registered;bArticles of Cooperation & By Lawscnumber of employees;dmembershipeassets, fdeposits gtrainings conducted
h. services renderedi. linkagesj. Core Management Team
Level of practice in governance
a. accountability
b. transparency
c. predictability and
d. participation
Governance Model
a. traditional b. corporate
c. democratic
d. eclectic
Problems in cooperative governance
Figure 7: A schematic paradigm showing the organization profile of cooperation, level of governance activities, governance model with the problems in cooperative govrnance
Organizational Profile of Alaminos City
- Five coop respondents- Registered 1991-2000 (2) 2001- 2010 (1) 1981 -1990 (2)- Re - registered RA 9520- 28 employees- 1884 membership- P 34,745,665.00 assets- P 7,185,043.08 deposits- 7 training conducted - Services rendered: lending, consumers, trading- Linkages: local (5), National (1)- Core Management Team 25
Organizational Profile of San Carlos City
- Three coop respondents- Registered 1991-2000 (1) 1961 – 1970 (1), 1951-1960 (1)- Re –registered RA 9520- 25 employees- 1222 membership- P 144,839,715.73 assets- P 69,779,847.56 deposits- 7 training conducted - Services rendered: lending, consumers, trading, production- Linkages: local (8), National (2)- Core Management Team 24
Organizational Profile of Dagupan City
- Five coop respondents- Registered 2001 -2010 (1) 1991 – 2000 (4)- Re –registered RA 9520 (4) RA 6938 (1)- 42 employees- 2138 membership- P 27,685,063.60 assets- P 7,714,198.87 deposits- 2 training conducted - Services rendered: lending, consumers, trading, production service, training, consultancy- Linkages: local (10), National (1)- Core Management Team 11
Organization Profile of Urdaneta City
- Two coop respondents- Registered 1991-2000 (2), 2001- 2010 (2) - 9 registered RA 9520- 28 employees- 704 membership- P 42,957,736 assets- P 2,541,344 deposits- 6 training conducted - Services rendered: lending, consumers- Linkages: local (1), National (3)- Core Management Team 9
Organization Profile of Pangasinan
- 15 coop respondents- Registered: 2001-2010 (2) 1991-2000 (9), 1981 – 1990 (2) 1961 – 1970 (1), 1951-1960 (1) - 14 re registered RA 9520 - RA 6938- 123 employees- 5948 membership- P 250, 228,180.33 assets- P 87,220,433.50 deposits- 22 training conducted - Services rendered: lending, consumers, trading, service, training & consultancy- Linkages: local (24), National (7)- 69 Core Management Team
Model of Governance
Model AWM Descriptive
Traditional model laid emphasis on the values for respect for elders and traditions, the family type of cooperative in which the operations are passed on from one generation to the other.
Corporate model refers to the business way in which a cooperative is operated with board members, shareholders, and audit reports, among others.
3.59 Much
Democratic model gives emphasis on participation and inclusivity. The manner of freedom and respect given to each member or associate of the cooperative to carry out the affairs of the institution
4.07 Much
Ecletic model refers to the mixture of any of the models either corporate and democratic or traditional and corporate being used by cooperative
3.07 Much
Level of Practice in Governance
Elements in Governance AWM Descriptive
Accountability refers to the conduct and way in which the affairs of the cooperative is being run through defined roles, responsibilities, and level of authorities, duties and its parameters/boundaries as well as understanding the benefits and risks by all cooperators.
4.29 much
Transparency covers transactions within the parameters of coop rules and regulations, regular audit and records are open to member
4.28 much
Predictability refers to the continuity of programs and policies of the cooperative
4.03 much
Participation refers to the decision making process of each and every member in the institution. The way in which ordinary members express their opinions about matters concerning their wellbeing and the cooperative.
3.75 much
Summary 4.08 much
0.00
50,000,000.00
100,000,000.00
150,000,000.00
200,000,000.00
250,000,000.00
volume
Alaminos DagupanCity
San Carlos UrdanetaCity
Provision of Credit
Alaminos City Dagupan City San Carlos City Urdaneta City Total
30,396,307.79 44,352,001 203,281,150.40 16,985,043 P295,014,502.30
1. Provision of Credit
0
2000
4000
6000
8000
10000
Alaminos Dagupan City San Carlos Urdaneta City
Member Borrowers
Alaminos Dagupan San Carlos Urdaneta Total
824 1184 8895 689 11592
5 24%
4 15%
3 18%
2 12%
1 36%
Agricultural
Microfinance
Cattle dispersal
Livelihood
Regular
Secured Loan
Medical
Education
Personal
Petty Cash
Salary
Rice Loan
Emergency
2. Employment Generation
Alaminos Dagupan San Carlos
Urdaneta Total
a. Self Employed Assisted
30 535 2643 515 3723
b. Work Abroad
0 56 179 75 310
c. Coop Employed
28 42 25 9 104
Total 58 633 2847 599 4137
3. Educational Assistance
Alaminos Dagupan San Carlos Urdaneta Total
1. Scholarship
1 1 1 3
2. Study Now Pay Later Plan
1 1
3. No. of Beneficiaries
5 1 20 10 36
4. Amount Spent
P2500 P 5000 P 20,000 P 250,000 P 277,500
Training Attended
Alaminos Dagupan San Carlos
Urdaneta Total
1. Local 5 5 3 1 14
2. National
1 2 3
3. International
1 1
Total 6 6 5 1 18
4. Mutual Aid Assistance
Alaminos Dagupan San Carlos
Urdaneta Total
1. Death Aid
1 3 2 6
2. Damayan 1 4 1 5
3. Amount P 464,093.50
P 80,000 P 109, 500
P 81,170 P 734,763.50
4. No. of Families Benefited
14 27 20 16 77
Gross Revenue
12,547,063.37 11,854,564 33,311,953.25 4,172,089.50 61,885,670
Net Surplus 2,402,384.30 1,613,220.7 1,671,112,92 2,336,690 6,519,408
Members Benefit
Total ISC/PR:
973,948.98 1,583,421.71 1,337,908 1,889,986.90 5,785,266
Interest on Share Cap
885,424.49 1,094,489 936,433.54 1,337,432 4,253,779
Patronage Refund
885,424.49 488,932.71 401,474.52 55,254.90 1,531,487
1. Environmental concerns
a. Orientation on sanitation
b. Mangrove planting
c. Tree planting
d. Vegetable seed distribution
e. Compost
2. Fertilizer Subsidy
3. Donation to church
4. Training sponsor
5. Fingerlings Distribution.
6. Piglet Distribution
7. Donation Flood/Typhoon
8. Feeding program
9. Donation medicine
10. Donation toilet bowl
11. Sport sponsorship
Alaminos Dagupan San Carlos Urdaneta Total
Total 14 6 5 3 28
Amount P 50,000 P 34,000 P 114,527 P122,000 P320,527.00
Cooperative Governance AWM Description
1. Accountability 1.99 Sometimes
2. Predictability 1.62 Sometimes
3. Transparency 1.76 Sometimes
4. Participation 1.61 Sometimes
Summary 1.75 Sometimes
Majority of the millionaire cooperatives of the four cities in Pangasinan are older and have re registered under the Philippine Cooperative Code of 2008 or Republic Act 9520. They have regular training program for officers, staff and membership, large membership base and owning and managing small to large cooperatives in terms of assets
Democratic model is most predominantly practiced by cooperatives
The elements of governance namely: accountability, transparency, predictability, transparency is “much practiced”
Cooperatives have contributed significantly to poverty reduction through their provision of services, and direct investments on community projects and programs.
There exists issues and challenges on cooperative governance particularly on members’ participation which show low rating on majority of the cooperatives in the four cities.
The integration of good governance in cooperative management intends to improve its service delivery methods
Good governance is therefore very important for the sustainability of cooperatives for the following reasons: to prevent fraud and mismanagement, promote sound decision-making, avoid costly fines and litigation, create/maintain a positive corporate image, attract and retain financing and investment.
All officers should undergo training on good governance before they assume their positions.
On the governance problems, there is an ardent need to establish reforms in weak areas of cooperative governance along accountability, transparency, predictability and participation.
Members should elect officers with strong leadership as cooperative success largely depends on good leadership of its officers.
The adoption and application of the cooperative governance by all cooperatives is indeed an effective means for poverty alleviation.
Cooperatives must ascribe to the tenets of good governance as a mechanism, practice, and media in which they help improve their members.