ELECTIVE 300:

COOPERATIVE MANAGEMENT
 HISTORY OF COOPERATIVE
• History of cooperative was evolving through the
thought of cooperation.
• Cooperation in farming up to credit cooperative,
which is equivalent to credit union
• In Filipino, cooperation refers to a group of people
working together in cooperation with each other for a
common end.
 HISTORY OF COOPERATIVE
• In Europe, during 18th century, the first cooperative
was organized in Britain known as Corn Mill
Cooperative by government workers in dockyards this
is to address the high prices charged by the corn mill
owners.
• In the Middle of 18th century, for business
undertaking, a mixture of production and consumer
formed to provide weaving materials and family
consumption goods.
 HISTORY OF COOPERATIVE
• Towards the end of 18th century, mutual insurance
was formalized this is to remedy the conations of the
poor. This was attributed in America by Benjamin
Franklin through forming an insurance cooperative.
 HISTORY OF COOPERATIVE
• Robert Owen the father of cooperative and a social
reformer, initiated the practices to address the issue
brought up by industrialization in England.
 HISTORY OF COOPERATIVE
Industrialization effects in Owen’s contribution to
England normalize industrialization
• Widening the gap of the rich • Reduce working hours from
and the poor 17 to 10 hours
• Unscrupulous business • Building houses for working
practices in the company premises
• Monopolization • Conduct adult education
• Exploitation of labor program for factory worker
• Long working hours and community residents
 HISTORY OF COOPERATIVE
Industrialization effects in Owen’s contribution to
England normalize industrialization
• Displacement or lay off of • Established infant school
employees in England
• Tampering of prices • Banned hiring children as
• Adulteration to maximize factory worker ages
profits below 10 years old
• Sold quality goods at a
fair price
 HISTORY OF COOPERATIVE
• In 1843, Rochdale Equitable Pioneers Society (REPS), a
consumer cooperative was organized which offers
basic commodities such as flour, sugar butter, and the
like. This helps improve the standard of living of the
people in England.
 HISTORY OF COOPERATIVE
• In Germany, Freidrich Whilhelm Raiffeisen, developed
brotherhood of men which is equivalent to credit
union or credit cooperative.
• Raiffeisen concept of cooperative was adopted by
Schulze-Delitzch for small businessmen
• The same concept was adopted in Germany to
address the economic depression.
 HISTORY OF COOPERATIVE
• Raiffeisen integrated modifications in credit union on
the thought of possible problem could be
encountered of the union. The following are:
✓Only member could borrow;
✓Low interest rate
✓Loan is for the provident and for productive
purposes;
 HISTORY OF COOPERATIVE
• Raiffeisen integrated modifications in credit union on
the thought of possible problem could be
encountered of the union. The following are:
✓Character based loan;
✓Common bond of interest amongst members, to
hold them together.
•Raiffeisen then, regarded as father of credit
cooperative.
 COOPERATIVE in the PHILPPINES
PRE-SPANISH PERIOD:
• Chinese cooperative concept was introduced to
Filipinos. The trading of goods practiced through
boats.
 COOPERATIVE in the PHILPPINES
SPANISH PERIOD:
• Philippines, as agricultural economy turns to feudal
economy and the organization of Guild or Gremios
took place which eventually turns to labor union.
• The middle class Filipino went to Europe to
benchmark and set up their very own.
 COOPERATIVE in the PHILPPINES
SPANISH PERIOD:
• Some Filipinos were initiate the organization of
cooperative in the Philippine:
✓Dr. Jose Rizal organized different cooperative in Dapitan
on 1896. Eventually, Rizal asked permission to Spaniard to
organize Owen type of cooperative but it was denied.
✓Emilio Jacinto organized cooperative in Laguna on 1898.
 COOPERATIVE in the PHILPPINES
SPANISH PERIOD:
• Some Filipinos were initiate the organization of
cooperative in the Philippine:
✓Isabelo de los Reyes – heading cooperative association
eventually became a Union Obrero Democrata which is
known as the first Philippine Labor.
• Corporativism was failure due to revolutionary fervor
and activities which preoccupied Filipinos.
 COOPERATIVE in the PHILPPINES
SPANISH PERIOD:
• Filipinos did not get any support from the Spaniard
when it comes to corporativism’s advocacies. Some of
these:
✓Filipinos were not paid for the rendered service;
✓Economic benefit or gain was not well associated with
cooperative work.
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
• The 600 Thomasite teachers educated Filipino and
colonial government of the Philippine on cooperative
management in American ways.
• Irish-American Missionaries and teachers Raiffeisen-
type rural agricultural cooperative.
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
• Bill and laws were formulated but some were
disapproved.
• Some laws were successfully formulated and enforced
for cooperative management
✓RA 2508 – Rural credit law this is support farmer-
members by granting loan for agricultural
operation. The Bureau of Agriculture were tasked to
implement this law.
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
✓RA 2818 – to provide appropriation of 1 Million to rural
credit association member fir rice and corn production.
✓This results to 544 rural credit cooperative were
organized in 42 provinces.
✓RA 3425 Cooperative Marketing Law - imposed
government control and intervention in operating
cooperatives, and empowered Bureau of commerce and
industry to organized farmers to marketing cooperative.
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
• In 1939, the total rural credit cooperative is equivalent
to 570 associations with 105,000 members and with
total resources of P3,376,400.
• Too, 160 Marketing cooperative were organized with
an approximate members of 5,000.
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
• Rural credit were not given value by the Rural Filipino.
They don’t have a savings habit and they are not into for
a long-term financial plan but indeed they concentrated
on farming or agricultural production and other related
activities which helps them provide their daily needs.
• However, through education, middle class citizen has
realized the essence of saving and planning for the future
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
• Bureau of Commerce and Industry was keep on nursing,
growing and expanding Marketing cooperative and
developed consumers cooperative. One of which is the
Consumer cooperative League of the Philippines on
October 18, 1938.
• Beforehand, University of the Philippines – UPLB & Siliman
were already able to organized consumers cooperative
initiated and sponsored by the employees, students, and
professors.
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
• Rev. Allen R. Huber, Christian Minister, were also able
to organized a successful credit union which inspired
and a role model to other churches in Vigan.
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
• Despite of the number of organized cooperative,
challenges and limitations of cooperative management
were inevitable. Thus, government articulated laws to
address these issues. The following laws are:
✓ Cooperative Law – this law enforces cooperative to
organized cooperative with at least 15 members, an
exemption on tax and other governmental fees for 5
years
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
✓NTC – National Trading Corporation – law
emphasized on the formation, organization, and
supervision of cooperative or mutual aid
association. This law also established NCF –
National Cooperative fund which responsible for
assisting government, as a marketing channel of
consumer goods to respective cooperatives at a fair
price.
 COOPERATIVE in the PHILPPINES
AMERICAN PERIOD:
✓ NCA –National Cooperative Administration was organized to
supervise cooperative in a wider spectrum and to take charge the
role of NTC and NCF.
 COOPERATIVE in the PHILPPINES
JAPANESE PERIOD:
• Pedro Sabido initiated in organizing consumers' cooperative
to help alleviate the economic suffering, food shortage, of
the people especially those people who are living in Manila.
• Agriculture base cooperative based cooperative were linked
to urban based cooperative to respond the high demand for
food.
 COOPERATIVE in the PHILPPINES
COMMONWEALTH PERIOD:
• Due to the need of assistance coming from cooperative
through ECA- Emergency Control Cooperative, for
distribution of relief goods, organization of cooperatives
were at fast pace.
• For this reason, proper orientation of members and
investigation for registration of cooperative were ignored.
• This lead to misconception of cooperative’s purpose, dole-
dishing organization for relief goods.
 COOPERATIVE in the PHILPPINES
COMMONWEALTH PERIOD:
• NCA converted to NCSBC - National Cooperatives and small
business Corporation.
 COOPERATIVE in the PHILPPINES
POST INDEPENCE PERIOD:
• CAO – Cooperative Administrative Office replaced NCSBC.
CAO helps restore economic status to normal state which
was affected brought up by world war II.
• CAO is responsible to promote, organize, and oversee the
cooperative management.
• CAO creation was influenced by Rural credit cooperative
association act, cooperative marketing law, and cooperative
law.
 COOPERATIVE in the PHILPPINES
POST INDEPENCE PERIOD:
• Another law was formulated, ACCFA – Agricultural Credit
and Cooperative Financing Administration, also known as
Agricultural Cooperative Law.
• ACCFA is responsible for extending assistance to small
farmers in securing liberal credit, promoting the effective
grouping of farmers in securing liberal credit, promoting the
effective grouping of farmers into cooperative associations.
• Large scale of financing is financed by USAID.
 COOPERATIVE in the PHILPPINES
POST INDEPENCE PERIOD:
• ACCFA extended also loans to FACOMAs – Farmers
Cooperative Marketing Associations. FACOMA eventually
failure due to very low repayment rate.
• The failure experience of FACOMA served as the basis for the
separation of agriculture and non-agriculture of cooperative.
• In 1967, the catholic church initiated for cooperative
movement through national rural congress for the purpose
of addressing social injustice and poverty issues. This latter
complemented an effort for cooperative organizing.
 COOPERATIVE in the PHILPPINES
POST INDEPENCE PERIOD:
• In 1969, The Code of Agrarian Reforms commanded that credit,
marketing activities among land reform beneficiaries course
through cooperatives.
• During Marcos regime, cooperative was politicized due to
intervention of politicians in cooperative which resulted to
mismanagement.
• External and foreign fund for marginalized sector in the society
were not directly handed to cooperative instead through NGO-non
government organization with the fear of malversation of fund.
 COOPERATIVE in the PHILPPINES
POST INDEPENCE PERIOD:
• During Pres. Corazon Aquino’s Administration, RA 6939 was
formulated known as the cooperative code of the Philippines. This
law enforces agrarian reform cooperative.
• CDA –cooperative development authority strictly monitored the
cooperative which are productive or not and weeded out the non-
operational for at least 2 years and those cooperative which failed
to submitted annual report. National Association of Cooperative
Education (NACE) were founded to address the same issue.
 COOPERATIVE in the PHILPPINES
POST INDEPENCE PERIOD:
• DECS-Department of Education Culture and Sports were converted
school canteen into teachers cooperative but cooperative has gone
away due to lack of cooperative education amongst teachers.
• Both Cooperative management subjects and courses were offered
in Polytechnique and in University of the Philippines with a positive
foresight for a better and brighter future of cooperative.
 COOPERATIVE in the PHILPPINES
POST INDEPENCE PERIOD:
• Cooperative faced diverse problems and major factors contribute
the to the difficulties in institutionalizing cooperatives:
✓Lack of education and education
✓Lack of adequate safeguards
✓Improper use of credit
✓Defective or inadequate security
✓Political interference
✓Lack of adequate facilities
✓Inadequate government support