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There are three INGs we are facing these days. This was Ronilo, the Manager of the Tagnanan CARP Beneficiaries Cooperative (TCBC). What are those was my question? Well, he said, “Our members are, “Aging, Ailing, and Dying!” On the one hand, this is not a surprise as some cooperatives are entering their 50th or 60th year of operations with many members who have been with them since the beginning. On the other hand, it speaks to the challenges cooperatives in the Philippines (and in many other countries) are facing, which I call the IONs. Attraction, Succession, and Competition!

 

 

The 50th Cooperative Leaders’ Congress organised by MASS-SPECC.

 

I was in Mindano to attend the 50th Cooperative Leaders’ Congress organized by our member MASS-SPECC. Having arrived a day before, I used the time to visit three of MASS-SPECC’s members - the Tagum Cooperative, TCBC, and the Magsige Multi-Purpose Cooperative. The visits were useful for me to relate to the theme of the Leaders’ Congress, “Achieving our Vision through Innovation and Shared Services.” For MASS-SPECC the vision is “All Members Enjoy Better Quality of Life” which puts individual members at the center of the cooperative enterprise. Through the visits and talking with members, I was able to connect the theme and the INGs and IONs challenges!

 

Cincuenta, the coffee table book which Tagum Cooperative brought out to celebrate its 50th anniversary captures their journey from humble beginnings with 38 members and Ph 80 share capital in 1967, to its current 101,883 members and share capital of Ph 2 billion. Tagum cooperative has an amazing 61,000 or 60% youth members! This is one way in which Tagum is addressing the issue of aging, by attracting young members to its fold. This focus on youth was not by accident but through careful design. Way back in 1969, the Youth in Action of Tagum was formed to promote credit unions in schools, colleges and university. The staff at the middle and senior management levels of Tagum Cooperative are young, eager and prepared to take on the mantle, addressing the issue of succession. Competition is intense in Tagum’s core business area of savings and loans. Commercial banks, land bank, microfinance institutions, fintech companies, the list goes on. I asked Chairperson, Rosalina Argent, how they kept competition at bay? “We spend a lot of time on education! Every member is taught their role and responsibilities and staff trained on their duties. Members are rewarded based on their participation in the activities of the cooperative. We know many of our members are aging and ailing and having to spend on health. We have a health scheme where preventive as well as curative needs are addressed. We even provide funeral services. We are a womb to tomb cooperative! Which private company is going to do that? Indeed!

 

The TCBC has its roots in the Comprehensive Agrarian Reform Program (CARP) of the 1990s, which granted farmers secure control over land and encouraged the formation of Agrarian Reform Beneficiary (ARB) cooperatives. Around 336 regular workers of the Tagnanan Estate Incorporated were allotted around 1,000 hectares of coconut plantation. The collective farming in coconut was not working out, so there was a shift to Cavendish banana plantation in a tie-up with a company. The new company, Nova Vista Management and Development Corporation also did not work out well for the farmers as they were just getting paid wages and finding it difficult to make ends meet. In 2009, with the assistance of the Foundation for Agrarian Reform Cooperatives Mindanao, Incorporated (FARMCOOP), TCBC got into an agreement with Unifrutti Philippines, Inc. (UPI), where TCBC would manage the whole farm and handle the banana growing business and UPI the marketing part.  The TCBC members now get 90% of the proceeds with 10% going to the operations of the cooperative.  There has been a significant positive change in the lives of the members and their families. TCBC’s experience shows that it is not enough to give land and improve inputs; the terms of agreement on the market side needs to also be strengthened to benefit the farmers. The challenge TCBC facing, which agriculture cooperatives are facing in many countries, is the children of farmers seeking newer pastures and fewer people coming into agriculture.

 

The Manuel Guianga and Sirib Growers and Employees Multi-Purpose Cooperative (Magsige-MPC), was founded in 2008 by Agripino L. Torres to improve the employment status of the employees working in the banana plantations. In 10 years, it has expanded to offer labor services (job contracting services) to agricultural and industrial companies, savings and loan and marketing of basic commodities to its 12,000 plus member-workers.  I asked Torres about the controversy surrounding manpower service cooperatives/ companies around the issue of Endo (end of contract; employment that is only for a short period of time) and “5-5-5” (employment setup, under which one can only work for a five-month period and such contract may be renewed again for another period of five months). “In both instances the issue is around nature of contract which prevents workers from acquiring security of tenure and benefits that regular employees enjoy. In our case each member is a co-owner of the cooperative and holds the status of a self-employed worker. They engage in contractual assignments with the cooperative serving as the contracting party.” He added, “We are growing our garment business and here the workers will be members and owners!”

 

The Cooperative Leaders’ Congress focused on innovation and shared services. Innovation was seen as doing things better to add VALUE to members in a way which is unique and compelling and meets the needs and circumstances of members. Adding value could take the forms of better products & services (effective use of technology), better processes, and improved management systems. The innovations were there to see in Tagum Cooperative’s ‘Women to tomb’ approach; TCBC’s contractual agreement; and Magsige’s proposed garment workers cooperative. Shared services are defined as cooperatives working together and combining resources for greater effect which result in efficiencies (processes, cost savings), focuses on activities that support business goals, and delivers quality services. MASS-SPECC used the occasion to sign a Memorandum of Understanding with Paramount Life and General Insurance Corp and launch the first of its Shared Services the “Yaman sa Kalusugan” Program – affordable health care services for its members, officers, and staff.

 

MASS-SPECC the oldest and largest cooperative federation in the Philippines began with mostly parish-based credit unions organized in different dioceses in Mindanao during the 1950s. It provides cooperative education and training through the Institute of Cooperative Studies; operates a Central Fund, which pools surplus funds of cooperatives for on-lending to cooperatives with financing needs; runs an Information & Communication Technology unit that provides software solutions and ATM services; and a Consultancy unit that provides technical support and advice. The influence of MASS SPECC cooperatives has been studied by the School of Economics of the University of Asia and the Pacific (UA&P). In their 2018 report, “Economic and Social Impact Study of Cooperatives,” they point out that the average output multiplier effect of MASS-SPECC cooperatives is approximately 4.6 percent of the average GRDP of Mindanao from 2014 to 2016; the spending-induced output multiplier effects through payments of compensation, dividends, and patronage refunds is about 3.8 percent of average GRDP of Mindanao from 2014 to 2016. The combined output multiplier effects of MASS-SPECC cooperatives due to gross sales/revenues, compensation, dividends, and patronage refunds are about 8.4 percent (about 27.97 billion pesos per year) of average GRDP of Mindanao from 2014 to 2016. The average employment multiplier effect of MASS-SPECC cooperatives from 2014 to 2016 is about 20,648 to 24,089 direct and indirect jobs translating to help reduce the total number of unemployed persons in Mindanao by 4.64 to 5.41 percent from 2014 to 2016.

 

The findings of this study only reinforce the need for cooperatives, especially those affiliated with the MASS SPECC Federation, to leverage their collective resources to explore better market opportunities, expand their social capital, and to influence cooperative-related policy decisions, to wield positive impact not only in the communities they serve but in the global community that looks forward to a better and sustainable future for all.

 

The Philippines is not alone. Recently in Korea, around 845 cooperatives from nine regional councils and three sectoral cooperatives (Korea Federation of Workers’ Cooperatives, Korea Federation of Civic Development Cooperatives, National Federation of School Social Cooperatives), have come together to form the National Council of Cooperatives.  Chairperson SOHN Jong-hyun who was elected as standing representative to lead the council said, “It is really meaningful that cooperatives that were established by the needs of communities and have led the people-centered economy set up a nationwide network. As members of the council, we together should lead people-centered economy and society that live together. If the cooperatives spread in all types of industries, such as co-parenting, IT, and funerals cooperate, as the next level, we may plan cooperative towns or villages. Thus, we will make efforts to create a sustainable cooperative ecosystem.”

 

The views expressed here are in a personal capacity and do not reflect those of ICA or ICA-AP.

 

Written by Mr. Balasubramanian Iyer, Regional Director, ICA-AP