Lecture Presentation of the Department of Agriculture Region -1

1. IMPORTANCE
OF COOPERATIVISM
COOPERATIVE DEVELOPMENT AUTHORITY
Dagupan Extension Office
MARWIN C. PERALTA
COOPERATIVE DEVELOPMENT SPECIALIST II

2. COOPERATIVE ???

3. Importance of Cooperatives
• Cooperatives are a special type of enterprise. They share some of the characteristics
of conventional enterprises such as (Micro, Small, Medium, Large)
• Cooperatives also have special organizational features, such as aiming at serving the
needs of user-members who jointly own and democratically control the
organization.
• Cooperatives also adopt specific strategic behaviours, such as providing their
services “at cost” to member-clients, buying their inputs at a fair price from
member-producers, or creating jobs.
• Cooperatives play a crucial role in the economy, contributing namely to the
stabilization of markets, by addressing market failures, countervailing concentrated
market powers, producing collective or trust goods and services.
• Cooperatives are also important for society, enabling civil society to take an active
role in economic, social and political affairs, as well as in contributing to strengthen
democracy.
ILO, 2018

4. • Cooperatives are well placed to- contribute to the SDGs. Role
of cooperatives to create and develop sustainable decent
employment, develop human resources, increase savings and
investment, etc.
• They are recognized as an important tool to empowering
people and improving conditions of poverty and income
inequality (Sibal,2001).
Importance of Cooperatives

5. • Cooperatives have been an important contributor in creating
and sustaining employment, they have the ability to advance
the ILO’s Global Employment Agenda and they have the ability
to contribute to promoting decent and productive work.
• At the same time, cooperatives respond to the needs of
communities.
Importance of Cooperatives

6. Why are we here?

7. TOPICS

8. CDA Mandate
Section 15, Article XII of the Constitution. The Congress shall
create an agency to promote the viability and growth of cooperatives
as instruments for social justice and economic development.
REPUBLIC ACT NO. 6939
AN ACT CREATING THE COOPERATIVE DEVELOPMENT AUTHORITY TO PROMOTE THE
VIABILITY AND GROWTH OF COOPERATIVES AS INSTRUMENTS OF EQUITY, SOCIAL
JUSTICE AND ECONOMIC DEVELOPMENT, DEFINING ITS POWERS, FUNCTIONS AND
RESPONSIBILITIES, RATIONALIZING GOVERNMENT POLICIES AND AGENCIES WITH
COOPERATIVE FUNCTIONS, SUPPORTING COOPERATIVE DEVELOPMENT,
TRANSFERRING THE REGISTRATION AND REGULATION FUNCTIONS OF EXISTING
GOVERNMENT AGENCIES ON COOPERATIVES AS SUCH AND CONSOLIDATING THE
SAME WITH THE AUTHORITY, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER
PURPOSES
RA 9520
…incharge of the registration and regulation of cooperatives

9. LEGAL BASES
• 2.2. Enabling Laws. In response to the Constitutional mandate, Congress of the
Philippines (legislature) passed the Cooperative Code (Republic Act 6938) and
Cooperative Development Authority (CDA) Charter (RA 6939) on March 10, 1990. The
Cooperative Code provides for the general concepts and principles; organization and
egistration; membership; administration;
dissolution; capital; recovery and funds; audit, inquiry and members right to examine;
allocation and distribution of net surplus; and special provisions relating to agrarian
reform cooperatives, public cooperatives, cooperative banks, credit cooperative and
cooperative insurance societies, among others.
• The RA 6939 created the CDA, the agency that promotes the viability and growth of
cooperatives as instruments of equity, social justice and economic development. The
law provides its powers, functions, and responsibilities; the governing body; budget
and funds; and rule making power, among others.

10. LEGAL BASES
• In 2008, RA 6938 was amended by RA 9520, with the inclusion of provision on
representative assembly, subsidiary cooperative, financial service cooperative, to
cite a few amendments, while keeping the provisions of RA 6938 basically intact.
• The policy of the state, as far as cooperative is concerned, is well-amplified in the
Cooperative Code which states, “ to foster the creation and growth of cooperatives
as practical vehicle for promoting self-reliance and harnessing people power
towards the attainment of economic development and social justice. The State shall
encourage the private sector to undertake the actual formation and organization of
cooperatives and shall create an atmosphere that is conducive to the growth and
development of these cooperatives.”
• To operationalize the policy, the government including all its branches, subdivisions,
instrumentalities, and agencies are all called to “ensure the provision of technical
guidance, financial assistance and other services to enable said cooperatives to
develop into viable movement that is free from any conditions that may infringe
upon the autonomy or organizational integrity of cooperatives.”

11. CDA’s VISION-MISSION
• VISION- An effective and efficient regulatory agency working towards
the development of viable, sustainable, socially responsive and globally
competitive cooperatives.
• MISSION- To ensure the safe and sound operations of cooperatives.

13. ORGANIZATIONAL STRUCTURE

14. JOSEFINA B. BITONIO , DPA
Regional Director

15. POWERS AND FUNCTIONS
1. Developmental Functions
•Formulates, adopt and implement integrated and comprehensive plans
and programs on cooperative development consistent with the national
policy on cooperatives and the overall socio-economic development plans
of the Government;
•Develops and conduct management and training programs upon request
of cooperatives that will provide members of cooperatives with the
entrepreneurial capabilities, managerial expertise, and technical skills
required for the efficient operation of their cooperatives and inculcate in
them the true spirit of cooperativism; and
•Provides, when necessary, technical and professional assistance to
ensure the viability and growth of cooperatives with special concern for
agrarian reform, fishery and economically depressed sectors.

16. POWERS AND FUNCTIONS
2. Regulatory Functions
•Registers all cooperatives and their federations and unions,
including their division, merger, consolidation, dissolution or
liquidation. It shall also register the transfer of all or substantially
all of their assets and liabilities and such other matters as may be
required by the Authority;
•Requires all cooperatives, their federations and unions to submit
their annual financial statements, duly audited by certified public
accountants, and general information sheets; and
•Orders the cancellation after due notice and hearing of the
cooperative's certificate of registration for non-compliance with
the administrative requirements and in cases of voluntary
dissolution.

17. Partnership between Government
and Other Stakeholder
• The partnership between government and cooperative stakeholders is engrained in the democratic
process in crafting rules on implementing programs affecting the cooperative sector. The
mechanism of consultation with the cooperative sector by the government is provided for in the
Cooperative Code and specified in particular, under Executive Order 95 Series of 1993 (EO 95).
• EO 95, among others, creates the National Coordinating Committee (NCC) composed of all
government agencies with programs on cooperative to coordinate with CDA for harmonious and
effective delivery of government services to cooperatives. It also calls for the formation of
consultative mechanism the cooperative sector at various levels of bureaucracy from municipality,
provincial, regional and national levels.
• The harmonious and effective delivery of government services to cooperative by government
agencies under the coordination of CDA is executed through memorandum of agreements (MOAs)
or Memorandum of Understandings (MOUs) between and by concerned government agencies and
CDA (Appendix 1). Basically, the MOAs/MOUs, spell out the obligations of parties in the delivery of
services to cooperatives.
• The MOAs/MOUs of CDA with relevant government agencies include the Department of
Agriculture, Department of Agrarian Reform, Insurance Commission, Securities and Exchange
Commission, Bangko Sentral ng Pilipinas, National Housing Authority, Office of Transport
Cooperatives and Department of Trade and Industry.

18. Partnership
With MOA With LGUs
EO 96
With
Coops:
BB/SB and
Koop Kapatid

19. • Autonomous
• Duly registered association of persons
• With a common bond of interest
• Voluntarily joined together to achieve their social, economic and
cultural needs and aspirations
• Making equitable contributions to the capital required
• Patronizing their products and services
• Accepting a fair share of the risks and benefits of the undertaking
in accordance with universally accepted cooperative principles.
Article 3 RA 9520

20. ART. 4. Cooperative principles
1. Voluntary and open membership
2. Democratic member
control
3. Member economic participation
4. Autonomy and independence
5. Education, training and information
6. Cooperation among cooperatives
7. Concern for community

21. Co-operative Values
• Co-operatives are based on the values of self-help, self-
responsibility, democracy, equality, equity and solidarity. In
the tradition of their founders, cooperative members believe
in the ethical values of honesty, openness, social responsibility
and caring for others.
ICA, 2015

22. TYPES of Cooperatives
(a)Credit Cooperative
(b) Consumers Cooperative;
(c) Producers
(d) Marketing Cooperative
(e) Service Cooperative
(f) Multi-purpose Cooperative;
(h) Agrarian Reform Cooperative

23. TYPES of cooperatives
(i) Cooperative Bank
(j) Dairy Cooperative
(k) Education Cooperative
(l) Electric Cooperative
(m) Financial Service Cooperative
(n) Fishermen Cooperative
(o) Health Services Cooperative

24. TYPES of Cooperatives
(p) Housing Cooperative
(r) Transport Cooperative
(s) Water Service Cooperative
(t) Workers Cooperative
(u) Other types of cooperatives as may be determined by the
Authority

25. Bitonio, 2018)

26. Classification of
Membership:
a.Per activity
b.Per membership

27. General Assembly
Board of Directors
Management Staff
Organizational Structure
Audit Committee Election Committee
Ethics
Committee
Mediation/
Conciliation
Committee
Secretary Treasurer
Other
Committees

28. Purposes of cooperatives
(1)To encourage thrift and savings mobilization among the members;
(2) To generate funds and extend credit to the members for productive
and provident purposes;
(3) To encourage among members systematic production and marketing;
(4) To provide goods and services and other requirements to the
members;
(5) To develop expertise and skills among its members;

29. Purposes of cooperatives
(6) To acquire lands and provide housing benefits for the members;
(7) To insure against losses of the members;
(8) To promote and advance the economic, social and educational status
of the members;
(9) To establish, own, lease or operate cooperative banks, cooperative
wholesale and retail complexes, insurance and agricultural/industrial
processing enterprises, and public markets;
(10) To coordinate and facilitate the activities of cooperatives;

30. Purposes of Cooperatives
(11) To advocate for the cause of the cooperative movement;
(12) To ensure the viability of cooperatives through the utilization
of new technologies;
(13) To encourage and promote self-help or self-employment as
an
engine for economic growth and poverty alleviation; and
(14) To undertake any and all other activities for the effective and
efficient implementation of the provisions of this Code.

31. Powers and Capacities of Cooperatives
1. To the exclusive use of its registered name,
2. To sue and be sued;
3. Of succession;
4. To amend its articles of cooperation in accordance with the provisions
of this Code;
5. To adopt by-laws not contrary to law, morals or public policy, and to
amend and repeal the same in accordance with the Code;
6. To purchase, receive, take or grant, hold, convey, sell, lease, pledge,
mortgage, and otherwise deal with such real and personal property as the
transaction of the lawful affairs of the cooperative may reasonably and
necessarily require, subject to the limitations prescribed by law and the
Constitution;

32. Powers and Capacities of Cooperatives
(6) To enter into division, merger or consolidation
(7) To form subsidiary cooperatives
(8) To join federations or unions
(9) To avail of loans, be entitled to credit and to accept and receive
grants, donations and assistance from foreign and domestic sources.
(10) To avail of preferential rights granted to cooperatives under Republic
Act No. 7160, otherwise known as the Local Government Code, and
other laws.

33. Powers and Capacities of Cooperatives
(11) To organize and operate schools in accordance with Republic
Act No. 9155
(12) To exercise such other powers granted by the Code or as stated in its
articles of cooperation.

34. COOPERATIVE AS A BUSINESS ENTITY
Basic Differences With Other Business Model

35. Bases for
Comparison
SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE
Number of
persons required
for formation
Only one person At least two or more
At least 5 persons are
required to form a
corporation. (natural
and juridical
persons can be
stockholders at the
same time)
At least 15 natural
persons are required
to form a primary
coop (10 primary
coops are
required to form
a federation or
union)
Grant of Juridical
Personality
No separate juridical
personality from owner
but business name should
be registered with the DTI
Mere agreement of
partners can be a
partnership. However,
it is better if
registered under the
SEC
Must be registered
with SEC
Must be registered with
CDA

36. Bases for
Comparison
SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE
Registration
Requirements for
Documentation Application Form
Contract of Partnership
Articles of
Incorporation, By –
laws and Bank
Statement
Articles of Cooperation,
By-laws,
Economic Survey,
Bonds of Accountable
Officers and
Treasurer’s
Affidavit
Capitalization
Contributions
Only the owner
contributes capital
Partners contribute cash
or services/industry
Stockholders pay for
the amount of shares
he wants to buy
A member can
subscribe up
to 10% of the
total subscribed
share capital

37. Bases for
Comparison
SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE
Management
Structure
Only one person decides Partners make a
collective decision
Board of Directors
make final decision
General Assembly has
the final
decision
Voting No voting rights
Votes proportional to the
extent of interest of each
partners
Votes proportional
to no. of stocks owned
by stockholder; proxy
voting allowed
One member, one
vote; no
proxy voting in primary
coops

38. Bases for
Comparison
SINGLE PROPRIETORSHIP PARTNE RSHIP CORPORATION COOPERATIVE
Liability Owner assumes full
liability
All partners are equally
liable except in
limited partnerships
Limited up to
authorized capital
Member’s liability is
only up to his/her
subscribed
share capital
Taxability Owner is liable for
Income tax
Partners pay tax on share
as partner
Profits taxable;
stockholders pay tax
on dividends received
Co-ops which transact
business with
their members ONLY
are tax exempt

39. Bases for
Comparison
SINGLE PROPRIETORSHIP PARTNERSHIP CORPORATION COOPERATIVE
Basis of Distribution
of Surplus/Profit
Owner enjoys all the
profits
All partners equally
share in the profit
or based on
Partnership Agreement
Stockholder’s share
in the profit is
dependent on the
no. of stocks which
he holds
Member’s share in the
surplus is based on his
paid-up share
capital and patronage
refund or volume of
business he/she
contributed to the
co-op
Governing Principles Purely Business
Management Principles
Partnership Principles as
stipulated by the
partners
Purely Business
Management
Principles
Co-op Values &
Principles and
Business Management

40. THE ROLE OF COOPERATIVES
• promoting social
justice
•economic development

41. Social Justice
Cooperatives are based on principles and
values that speak directly to the issue of social
justice. Most traditional cooperatives follow
the seven principles of cooperative identity,
promoted by the International Cooperative
Alliance (ICA),
• These principles call for the practice of
democracy, equality, equity and solidarity.
Cooperatives also embrace the ethical values
of honesty, openness, social responsibility and
caring for others.
• With these principles and values at the core
of cooperative operations, the poor, excluded
and marginalized sectors of society are usually
served well by cooperatives

42. Social Justice
• …could be seen as equal
opportunity treatment of all
persons in society.
• It focuses on the dignity of each
individual.
• …promotes the participation of
each individual in the development
of their society and to enjoy the
rewards of that development. •
• Cooperatives have the
responsibility to ensure this
happens

43. SOCIAL DEVELOPMENT

44. UNDERSTANDING SOCIAL DEVELOPMENT
Social Development refers to the progressive improvements in the
living conditions of quality of life enjoyed by society and shared by its
members

45. SOCIAL DEVELOPMENT
• In the broadest sense “it signifies all aspects of development
that are of collective nature pertaining to the society as a whole
• In a narrower sense, it would be used with reference to the
human welfare aspects of development, that is improving the
quality of life and more equitable distribution of material and
cultural goods
• Social development may be used in connection with structural
transformation in society seeking changes in the system of
stratification and in degree of mobility

46. Social structure
ELITE
MIDDLE POPULTAION
POVERTY THRESHOLD

47. ELITE
POVERTY THRESHOLD
MIDDLE POPULATION
Structural Stratification through Social Development

48. SOCIAL RESPONSIBILITY
• 7th cooperative principles, i.e. the “Concern for Community” and
determines whether the cooperative work for the community’s
sustainable development through policies approved by their members.
The audit focuses not only to the economic side of the cooperative but
also the social aspect of the organization and appraises

49. SOCIAL RESPONSIBILITY
The community
development fund
shall be used for
projects or activities
that will benefit the
community where
the cooperative
operates.

50. ECONOMIC DEVELOPMENT

51. Economic Development
• Cooperatives have also been instrumental in promoting
inclusive development in rural areas, helping to both
strengthen and diversify rural economies.
• Financial cooperatives provide
access to credit for members who might
not typically have access to the larger
savings and commercial banks. This is
significant in markets where financial
providers are absent owing to poor
revenue prospects, high risks, or high transaction costs. This access to
financial services often supports the formation of small and micro
businesses.
• Cooperatives have also been able to
strengthen agricultural production and
improve access of poor farmers, especially
through engaging in fair trade

52. HOW COOP?
POVERTY
THRESHOLD
ELITE
MIDDLE
POPULATION

53. HOW?
• The need to promote the business
potential of cooperatives so they can
contribute to sustainable development
and decent employment, in the context
of the urgent need for social justice.
• Empowering cooperatives to leverage
their capacity to contribute to social
justice requires a sound policy and
legislative framework

54. Conclusion
• As governments around the world cut
services and withdraw from regulating
markets, cooperatives are being
considered useful mechanisms to manage
risk for members in agricultural or other similar cooperatives
• Strengthen the communities in which they operate
•Cooperatives generally provide an economic boost to the
community as well.

55. Cooperatives can engage in a broad range of
activities, the most common being in
• education, training, and human resource development;
• community development;
• enterprise development and employment generation
• health and nutrition;
• law, advocacy, and politics; and
• sustainable development

56. “By virtue of the principles of cooperatives, there
is an integral relationship between a cooperative
at its community. Often not, cooperatives are
acknowledged as playing a role in community
economic development, cooperatives are
essentially a response to community
development opportunities or challenges.”

57. TOPICS

58. A G Y A M A N A K ! ! !

59. Reference and Credit to
DIR. JOSEFINA B. BITONIO
Regional Director
JACQUELINE L. DE LEON
Senior CDS