Cooperation is the way forward
Iattended a webinar by the Agribusiness and Countryside Development Foundation, a non-government organization dedicated to generating jobs in rural areas, of which I am a member. Every two weeks, we invite an expert on an aspect of the agriculture industry to give a talk with the goal of learning from them and possibly connecting them to individuals and organizations who can help their cause, or vice versa.
This week’s guest was educator and business consultant Bien Nito of Nitobe Business Consulting whose talk, “Philippine Cooperative Challenges and Way Forward” reminded us that when run well, a cooperative can spell success for its members.
According to Article 3 of the Republic Act No. 9520, which amended the “Cooperative Code of the Philippines” to the “Philippine Cooperative Code of 2008,” a cooperative is “an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles.”
Neto noted that by virtue of this, it is “a social business venture organized for a social purpose — mitigating [or] reducing a social problem or a market failure—and to generate social value while operating with the financial discipline, innovation, and determination of a private sector business.”
In short, a cooperative harnesses the power of many to create businesses and services that will benefit its members. De La Salle University has an excellent primer on this (just google “cooperative Philippines” and the “Primer on Cooperatives” will be the second to come out on search.
Neto further explained that cooperatives serve complementary roles which include productive services such as offering members business loans, job generation, manufacturing, supplying of inputs, produce marketing, and other general services; as well as supplementary roles or providential services like education, consumer products (hence, coop groceries and the like), and medical, housing, retirement, and even memorial services.
As of 2020, the Philippines has 18,848 coops, the top four areas/regions being Pampanga, NCR, CALABARZON (Region 4A), and Central Visayas (Region 7), with agriculture cooperatives being the third most popular. According to the Cooperative Development Authority, 11.5 million Filipinos belong to a cooperative, only 13.29 per cent of the Philippines’ total population of 113.9 million (both as of 2021). This means there’s still a lot of opportunities for people of different sectors to band together to form social businesses. Cooperatives can be beneficial for small farmers in particular because banding together can afford them more access to capital, marketability, business opportunities, tax breaks, and the like.
Neto outlined some rules for good governance, which include “sound business policies, active member participation, competitive products and services, adequate internal capital mobilization, observance and practice of ethical conduct and behavior, prevalent concern for the holistic development of members, and enhanced organizational credibility.” Basically the same rules for running a social business, which it is.
The common theme behind successful agriventures, big or small, is running it like a business. This seems to be one of the most difficult parts to get over, but once surmounted, can be a pathway to a stable business and safety net, two important things, especially during these times.