Module 1 Part II Principles & Types of Cooperatives

Part II: Concept, Principles, and

Types of Cooperatives

ARD Jo B. BitonioCDA Dagupan Extension Office

Basic Course for Calasiao Plant and Related Companies MPC – September 17, 2011

Article 3 RA 9520 defined cooperative as:

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.

It was here that the first co-operative store was opened.

The Code of Conduct for which the 1st successful cooperative in Rochdale in 1844 consisting of 14 core principles.

The cooperative principles cumulatively are the lifeblood of the movement. Derived from the values: democracy, equality and equity, self-help and self responsibility and solidarity have been infused the movement from its beginnings, they shape the structures and determine the attitudes that provide the movement’s distinctive perspectives.

Democracy

SolidaritySelf Help &

Self Responsibility

Equality & Equity

Source: ICA Core Values of Cooperation

The cooperative principles was refined, restated and expanded in 1966 to a set of six principles and in 1995 ICA listed Seven Principles. The importance of these principles as no less than the lifeblood of the cooperative movement formed the basis for the principles on which co-operatives around the world operate to this day.. It also describes the principles as “elastic,” meaning flexible, and therefore “applicable with different degrees of detail to different kinds of cooperatives in different kinds of situations”.

ICA: 1995 Cooperative Principles

1. Voluntary and Open Membership

Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership without gender, social, racial, political or religious discrimination.

2. Democratic Member Control

Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are also organized in a democratic manner

3. Member Economic Participation

Cooperatives contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members allocate surpluses for any of the following purposes; developing their cooperative, possibly by setting up reserves, part of which would at least be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

4.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.

5. Autonomy and Independence

Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, they do so on terms to ensure democratic control by their members and maintain their cooperative autonomy.

6. Cooperative among Cooperatives

Cooperatives service their members most efficiently and strengthen the cooperative movement by working together through local, national and international structures.

7. Concern for Community

Cooperatives have a special responsibility to ensure that the development of communities- economically, socially and culturally- is sustained. They have a responsibility to work steadily for the environmental protection of their communities.

Article 23, RA 9520 distinguishes the type of cooperatives in the Philippines:

• Credit – promotes and undertakes savings and lending services to its members;

• Consumers – to procure and distribute commodities to members and non-members;

• Producers – undertakes joint production whether agricultural or industrial Marketing – supply of production inputs and markets their products; and other services


• Service – engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electric light and power, communication, professional and other services Multi-purpose – combines 2 or more business activities • Advocacy – promotes and advocates cooperativism among its members and the public; • Agrarian Reform – organized by marginal farmers majority of whom are agrarian reform beneficiaries;

Article 23, RA 9520 distinguishes the type of cooperatives in the Philippines; • Cooperative Bank – providing a wide range of financial services to cooperatives and their members

• Dairy – production of fresh milk which may be processed and/or marketed as dairy products; • Education – owning and operating licensed educational institutions; • Electric – undertaking power generation, acquisition and operation of sub transmission or distribution to its household members;


• Financial service – engaging in savings and credit services and other financial services; • Fishermen – marginalized fishermen where their products are marketed either as fresh or processed products; • Health Services – providing medical, dental and other health services; • Housing – assist or provide access to housing for members who participate in the savings program for housing; professional and other services


• Insurance – business of insuring life and property of cooperatives and members

• Transport – services including land and sea transportation;

• Water Service – own, operate and manage water systems for the provision and distribution of potable water to its members;

• Workers – organized by workers, including self-employed, to provide employment and business opportunities

• Other types as maybe determined by the Authority

1.RA 95202. ICA Core Values3. ICA Coop Principle4.Microsoft Encarta

Reference:

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Module 1 Part II Principles & Types of Cooperatives