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WHAT IS
COOPERATIVE?
A
cooperative is a duly registered association of persons, with a common bond of
interest who have voluntarily joined together to achieve a lawful common social
or economic end, and making equitable contributions to the capital required and
accepting a fair share of the risks and benefits of the undertaking in
accordance with universally accepted cooperative principles.
By forming a
cooperative, you pool money, human resources and talent to build capital, and
work together to produce more goods and raise incomes. Through cooperatives, you
can look for other sources of loans at low interest rates instead of borrowing
from informal lenders or usurers. The cooperative can also be a mechanism for
marketing your produce.
COOPERATIVE PRINCIPLES:
Every Cooperative shall conduct its affairs in accordance with Filipino culture
and experience and the universally accepted principles of cooperation such as:
1. Open and
Voluntary membership- membership in a cooperative
shall be voluntary and available to all individuals regardless of their
political, racial or religious background or beliefs.
2.
Democratic Control- cooperatives are democratic
organizations. Its affairs shall be administered by persons elected or appointed
in a manner agreed upon by members. Members of primary cooperatives shall have
equal voting rights on an one-member-one vote principle, while a secondary or
tertiary cooperative shall have voting rights as delegate of
members-cooperatives, but such cooperatives shall have only five (5) votes. The
votes cast by the delegates shall be deemed as votes cast the members thereof.
3. Member
Economic Participation- members contribute equitably
to and control the capital of their cooperative. At least part of that capital
is usually the common property of the cooperative. Members usually receive
limited compensation, if any, on capital subscribed as a condition of
membership. Members allocate surpluses for any or all the following purposes:
developing their cooperative, possibly by setting up reserves, part of which at
least would be indivisible; benefiting members in proportion to their
transactions with the cooperative; and supporting other activities as a approved
by the membership.
4. Autonomy
and Independence-
cooperatives are autonomous, self-help organizations controlled by their
members. If they enter into agreements with other organizations (including
governments) or raise capital from external sources, they do so on terms that
ensure democratic control by the members and maintain their cooperative
independence.
5.
Education, Training and Information- cooperatives
provide education and training for their members, elected representatives,
managers, and employees so they can contribute effectively to the development of
their cooperatives. They inform the general public-particularly young people and
opinion leaders about the nature and benefits of cooperation.
6.
Cooperation among Cooperative - cooperatives serve
their members more effectively and strengthen the cooperative movement by
working together through local, national, regional, and international
structures.
7. Concern
for the Community- cooperatives work for the
sustainable development of their communities through policies approved by their
members.
COOPERATIVE PRACTICES:
Cooperatives follow certain operational guidelines. These are practical response
to local needs. Some are adopted from standard international practices, others
are local innovations. But all these are aimed at perfecting cooperative
operations. They are:
Capital
Formation - Starting a new cooperative can create a
need for substantial capital. A problem develops when trying to operate with
limited membership equity capital. The task of financing a new cooperative with
member equity alone is usually impossible. Therefore, the best source of
additional funds needed is from members in the form of: a) membership fee or
purchase of stock; b) agreement to withhold portion of net earnings profits); c)
by assessment based on units of products sold or purchased.
Cash Trading
- This is business done on a cash and carry basis. The customer enjoys at least
the use of the goods and services for the cash payment he/she gives. Cash
trading promotes equality since anybody with cash can enjoy the service
patronage. This practice can train members to observe the habit of balanced
spending. Furthermore, the cooperative would be able to avoid bad debts and
stabilize business operations. Finally, it is a way of increasing growth.
Selling at
market price - Cooperatives offer goods and services
at prevailing market prices. This promotes stability. It can cope with
operational expenses and cover up the negative effects of shrinkage,
depreciation and losses. It helps maintain the prices of goods;
Cooperatives
can avoid destructive competition - Fostering
constructive competition among cooperatives will safeguard the interests of
consumers. Cooperatives are encouraged to cooperate in unison and bring their
joint power in the market up to the level achieved by enterprises that are
operated for the benefit of other stakeholders. They cooperate in order to get a
fair deal from the large scale buyers of their products. Consumers cooperate to
get a better deal from manufacturers and suppliers. Credit unions are formed to
counter the power of large scale financial institutions. Price fixing agreements
and cartel methods are prevented.
Constant
expansion - As organizations, cooperatives have to
grow for community services. Expansion is a must. It is done intensively and
extensively. New members should be recruited to accumulate more capital and
savings to support operation of the expanded business and services which in the
long run will provide more benefits for them. However, members in this regard
should undergo continuous education and training to learn various management
practices/techniques and effective financial supervision.
Quality
standardized goods - Cooperatives are intended to
develop communities through the production of high quality goods and provision
of better services. Cooperatives could help by patronizing only standardized
products and services of high quality. Hence, different types of cooperatives
will strive to improve their goods and services to stand competition with
business establishments. This in turn will be instrumental in improving life in
the country.
Cooperative
wholesale business or interlending (cooperative bank).
Cooperatives can be organized with enough people and capital. They respond to
the needs of the community. Needs arise when there are people. The expansion of
membership may result in wholesale business. In fact, to be effective, wholesale
business, interlending (cooperative bank), could be done by primary societies.
Defects from retail business could be avoided.
The benefits
from the wholesale are considerable. Members can
market and acquire the goods and services at the right price and quality. They
can even lower and raise savings. They can also influence the production of
badly needed goods and services;
Minimize
expenditures - A significant factor favoring the
growth of cooperative is its being a community project. Their officers do not
receive remuneration. If they get compensation, it is only in the form of
allowances, per diems, or honoraria. When audit shows that the cooperative is
not capable or can afford the minimum wage, only employees get paid regularly.
The government can give exemption. Furthermore, laws may allow exemption from
income and sales taxes. Minimizing expenses should not be taken as a remedy to
cover up the weaknesses of the system. It is not to be conceived as a form of
dole-outs, but rather, it should be considered as motivation to make the
movement stand on its own and soon attain its objectives. Once its objectives
are achieved, the movement can take its rightful place in the development of the
country.
WHAT
ARE THE TYPES OF COOPERATIVES?
Credit
Cooperative: promotes thrift and savings among its members and creates funds
in order to grant loans for productive and provident purposes.
Consumer
Cooperative: The primary purpose is to procure and distribute commodities to
members and non-members.
Producers
Cooperative: undertakes joint production whether agricultural or industrial.
Marketing
Cooperative: engages in the supply of production inputs to members, and
markets their products.
Service
Cooperative: engages in medical and dental care, hospitalization,
transportation, insurance and housing.
Multi- Purpose
Cooperative: combines two (2) or more of the business activities of these
different types of cooperatives.
WHAT
ARE THE CATEGORIES OF COOPERATIVES?
Cooperative shall be
categorized according to membership and territorial consideration. In terms of
membership, cooperatives shall be categorized into:
Primary - The
members of which are natural persons of legal age.
Secondary -
The members of which are primaries.
Tertiary - the
members of which are secondaries upward to one (1) or more apex organizations.
Thus, those with
cooperative memberships are considered federations or unions as the case may be.
In terms of territory, cooperatives shall be categorized according to areas of
operation which may or may not coincide with the political subdivisions of the
country but, those organized by minors shall be considered a laboratory
cooperative and must be affiliated with a registered cooperative. It is
governed by special guidelines promulgated by the CDA.
WHAT
ARE THE KINDS OF MEMBERSHIP IN A COOPERATIVE?
A cooperative has two
kinds of members: regular members and associate members.
A regular member
is entitled to all the rights and privileges of membership as stated in the
Cooperative Code and the coops by laws.
An associate
member has no right to vote and be voted upon and is entitled only to such
rights and privileges provided by the cooperatives by laws.
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