Cooperative as Practical Vehicles for Poverty Alleviation Economic Growth And Equity

REPUBLIC ACT NO. 8425AN ACT INSTITUTIONALIZING THE SOCIAL REFORM AND POVERTY ALLEVIATION PROGRAM, CREATING FOR THE PURPOSE THE NATIONAL ANTI-POVERTY COMMISSION, DEFINING ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES

 RA 8425 divides the basic sectors into 14 main groupings: Farmers and landless rural workers Artisanal fisher folk Urban poor Indigenous people and cultural communities Workers in formal labor and migrant workers Workers in the informal sector Women Children Youth and students Senior citizens Persons with disabilities Victims of disasters and calamities Non-governmental organizations

COOPERATIVES"Cooperative" — Refers to a duly registered association of at least fifteen (15) persons, majority of which are poor, having a common bond of interest, who voluntarily join together to achieve a lawful common social and economic end. It is organized by the members who equitably contribute the required share capital and accept a fair share of the risks and benefits of their undertaking in accordance with the universally accepted corporate principles and practices; 

SOCIAL PROBLEMS Corruption POVERTY Overpopulation Child Abuse Lack of adequate health services Terrorism Unemployment

TYPES OF POVERTY

ABSOLUTE POVERTY OR DESTITUTION refers to the deprivation of basic human needs, which commonly includes food, water, sanitation, clothing, shelter, health care and education.

RELATIVE POVERTY defined contextually as economic inequality in the location or society in which people live

CAUSES OF POVERTY

Overpopulation 

Overpopulation is defined as the situation of having large numbers of people with too few resources and too little space. Overpopulation can result from either a high population density (the ratio of people to land area) or from low amounts of resources, or from both.

A high population density pressures the available resources in the country, as the resources can only support a certain number of people. 

Poverty can also depend on the country's mix of population density and agriculture productivity

High birth rates contribute to overpopulation in many developing countries. Children, especially boys, are assets to many poor families because they provide labor, usually for farming.

Distribution of resources:

In many developing countries, the problems of poverty are massive and pervasive. In recent decades most of these countries have tried to develop their economies with industry and technology with varying levels of success. Many developing countries, however, lack essential raw materials and the knowledge and skills gained through formal education and training. Because these things are necessary for the development of industry,developing countries generally must rely on trade with developed countries for manufactured goods, but they cannot afford much.

According to reports, people’s incomes are not enough to cover the cost of their basic necessities and provide them basic services such as water, electricity, transportation and communication.

Lack of education:Illiteracy and lack of education are common in poor countries. Governments of developing countries often cannot afford to provide for good public schools, especially in rural areas. . 

In countries with high populations, unemployment levels of only a few percentage points mean that millions of working-age people cannot find work and earn an adequate income.

Because unemployment figures indicate only the number of people eligible to work who have no job but are seeking employment, such figures are not necessarily an accurate indicator of the number of people living in poverty. Other people may not be able to find enough work or may earn wages too low to support themselves.

Environmental degradation:

Environmental degradation is the deterioration of the natural environment, including the atmosphere, bodies of water, soil, and forests — is an important cause of poverty. Environmental problems have led to shortages of food, clean water, materials for shelter, and other essential resources.

People in developed countries, on the other hand, have technologies and conveniences such as air and water filters, refined fuels, and industrially produced and stored foods to buffer themselves from the effects of environmental degradation.

 

Economic trends:

Poverty in many developed countries can be linked to economic trends.

Changes in labor markets in developed countries have also contributed to increased poverty levels. For instance, the number of relatively high-paying manufacturing jobs has declined, while the demand for workers in service- and technology-related industries has increased.

Historically, people have learned the skills required for jobs that involve manual labor, such as those in manufacturing, either on the job or through easily accessible school vocational programs. As these jobs are replaced by service- and technology-related jobs—jobs that usually require skills taught at the college level—people who cannot afford a college education find it increasingly difficult to obtain well-paying work.

Reports have noted that poverty is also symptomatic a symptom of poor basic services, scarce financial resources and low returns from natural wealth such as oil, gas, minerals and fisheries while revenues from public investments and taxes are exposed to corruption and embezzlement. 

Economic

- High rate of unemployment       - Unemployment is rampant now that the global financial crisis has ravaged the world's economy. With a higher number of unemployed people, crime rates in these cities will increase as people grow desperate to survive. It is also believed, however, that some governments of the world intentionally keep a "sufficient" number of people out of work as a replacement batch when the need arrives.

- Unfair tradeHigh subsidies and protective tariffs for agriculture in the developed world drains the taxed money and increases prices for consumers in the developed world, decreasing competition and efficiency and preventing exports by more competitive agricultural and other sectors in the developed world due to retaliatory trade barriers and undermining the very type of industry in which developing countires do.

Corruption (Economically-wise)Corruption often accompanies centralization of power, when leaders are not accountable to those they serve. More directly, corruption inhibits development when leaders help themselves to money that would otherwise be used for development projects. 

Corruption, both in government and business, places heavy cost on society. Businesses should enact, publicize and follow codes of conduct banning corruption on the part of their staff and directors. 

Effects

Malnutrition

The hunger situation is alarming.

Food insecurity is blamed for the fact that many preschool children are underweight and malnourished. An economist pointed out that "inadequate food can adversely influence workers' productivity."

The main reason why hunger is worsening is the people's lack of income to buy food.

Poor Economic growth

The poor remain poor because they cannot borrow against future earnings to invest in education, skills, new crops, and entrepreneurial activities; they are cut off from economic activity because many collective goods (such as property rights, public safety, and infrastructure) are under-provided, and they lack information about market opportunities.

Child Labor

According to the National Statistics Office, 3.6 million Filipino children, aged 5-17, are child laborers. When the parents just don't have enough money to make ends meet they usually force their children out of school and send them to work out on the streets, haciendas or factories. Earning money for their food and shelter became their sole purpose, no longer the education that should have served to bring them a better future.

Observations: Effects

Bad living conditions

Because of poverty, many families are forced to occupy public and private lands without the right to do so. And, because this land is not theirs, it tends to overcrowd. Because of overcrowding, the environment usually becomes unsanitary and heightens the chances that disease will spread.

Crime/ Theft

Due to the hardships in life caused by poverty, many people can’t even get enough money to live. This causes them to do whatever it takes to be able to sustain their and their family’s need even when it involves stealing.

COOPERATIVE AS PRACTICAL VEHICLES FOR POVERTY

Are cooperatives able to reduce poverty and if so, by which mechanism? What concreteexamples of poverty reduction exist? What are the success factors that helpthese examples and what obstacles hinder these? What measures work and whatdoes not work?

What about Cooperatives and Sustainable Development Goals?

Cooperative enterprises are instrumental in providing opportunities for productive employment as well as offering services such as health care, education, credit, improved infrastructure and sustainable energy. They are guided by values of social dialogue and democracy, and are often rooted in local communities, making them a sustainable option for achieving development.

The cooperative organization works as the independent variable in the model andpoverty reduction and business promotion function as the dependent variables. Thesocial positions, human conditions and the enabling environment are the interveningvariables that influence the relationship of the dependent and independent variables.

Cooperatives and Poverty Reduction

Poverty reduction has been at the top of the international development agenda since the Second World War (Sachs 1997).

Cooperatives have been contributing to the achievement of that universal goal ever since. Evidence from different regions around the world shows that cooperatives have an important role to play in reducing poverty in local communities where they are embedded.

For Example in India, dairy cooperatives generate employment for 13.4 million rural households. Cooperatives’ potential to contribute to poverty reduction is explained by the fact that they are membership-based organizations owned by their users (Birchall 2004).

Women and youth are also choosing the cooperative form to start enterprises of their own, thus creating new jobs and opportunities.

Since cooperatives are still the main channel for rural people to access financial services, get lower cost inputs, storage, transport and get their products to market, they serve to secure livelihoods and reduce poverty.

Cooperatives are one of the largest providers of microfinance services to poor people, allowing them to access the financial support they need to improve their livelihoods. Cooperatives have played and continue to play an important role worldwide in poverty reduction, facilitating the construction of homes, the provision of agricultural loans, economic growth and social development. 

Cooperatives and Employment Creation

One of the major global concerns is the achievement of full and decent employment. All over the world, unemployment is growing and there are fears that it will continue to increase in the next few years due to the current financial crisis.

Cooperatives are major providers of employment in rural areas where private investors have no or little interest and where agriculture is the main employment generator.

While agricultural cooperatives have played a central role in job creation in agricultural production, processing, marketing, purchasing and sales, rural cooperatives have also boosted employment in other sectors like financial services, energy, housing, tourism and handicrafts (ILO 2008).

For example, over 257,000 jobs have been created by agricultural cooperatives in Japan’s rural areas, and 65,215 jobs in the Philippines. Contrary to other forms of investment, cooperatives are less likely to relocate to lower wage areas, but instead prefer to find innovative ways to retain jobs and remain competitive (ILO 2007).

Recent research also shows that during the global financial crisis, financial cooperatives can provide a credible alternative to the investment-owned banking system hence securing jobs and creating new ones in the financial sector (Birchall 2013). With the ability to create and maintain jobs, cooperatives have made considerable contributions to employment creation.

It is generally recognized that cooperatives respond effectively to the ever-changing needs of people. For example, in response to the effects of globalization, people continue to choose cooperatives to address their needs. In a number of countries, people are starting new cooperative enterprises in such areas as social care and information technology.

The values of cooperation - equity, solidarity, self-help and mutual responsibility - are the cornerstones of cooperatives and should be sustained so that cooperatives can continue to respond with flexibility and innovation to changes and challenges posed by globalization

What Next?

In order to bring cooperatives’ voices into the post-2015 development agenda process, the International Labour Organization’s Cooperatives Unit, in collaboration with the International

Cooperative Alliance (ICA), the United Nations Research Institute for Social Development (UNRISD) and other partners has launched an initiative on the contribution of cooperatives to sustainable development.

THE ROLE OF COOPERATIVES IN ECONOMIC GROWTHIn his message on the occasion of the International Day of Cooperatives, the Secretary-General observed that:

"Cooperatives are at work in almost every country and economic sector.

More than 760 million people around the world are engaged in the cooperative movement.

As business organization, cooperatives contribute to economic development, generating more

than 100 million jobs and securing the livelihoods of nearly a quarter the world’s population.

Cooperatives provide an important channel for bridging market values and human values.

Within the UN system, the ILO is responsible for the largest and most diversified programme for

the promotion of cooperatives.

Viable and self-reliant cooperatives formed by producers, consumers, workers and business

people worldwide have demonstrated their enormous potential for creating and consolidating

employment opportunities, empowering people, providing protection and alleviating poverty.

The ILO technical assistance programme for cooperative development focuses on policy and

legal advice, capacity-building through human resource development, poverty alleviation

through self-help, alternative delivery mechanisms for social services, and a special regional

programme for indigenous and tribal peoples.

COOPERATIVE FOR EQUITY

Some definitions and differences of Equity

• it is what is left over after all of the debt and other obligations (liabilities) of the company have been paid

• is what belongs to the owner(s) of a firm and theoretically includes all that the owners have invested in the company over time, including funds used to start the company, annual earnings that have been retained in the company over the years, and any

ongoing investments that have been made to replace and improve the organization's assets. It also sometimes includes intangible assets such as brand name or good will

• An ownership interest in a corporation in the form of common stock or preferred stock.

• Total assets minus total liabilities; here also called shareholder's equity or net worth or book value.

In the context of a futures trading account, it is the value of the securities in the account, assuming that the account is liquidated at the going price. In the context of a brokerage account, it is the net value of the account, i.e. the value of securities in the account less any margin requirements.

Key Differences in Business Structure

Cooperative Corporation

C Cooperative Sole proprietorship Non Profit Organization

Who are the owners?

Members One or more stockholders

Individual No ownership

What are the business purpose?

To meet member needs to goods and services

To earn a return on owner investments

To provide owner employment a return on owner’s investments

To provide services or information

How is the business financed?

Stock/shares to members, and sometimes outside investors; retained profits

Sale of stock; retained profits

Proprietor’s investment; retained profits

Grants, individual contributions, fees for services

Who receives profit?

Members in proportion to use; preferred stockholders in proportion to investment, up to 8%

Stockholders in proportion to investment

Proprietor Retained within the organization

What is owner legal liability?

Limited to members Limited to stockholders’ investments

Unlimited for proprietor

Limited to assets of the organization

Education, Cultural Upliftment and Delivery of Basic Social Services through Cooperative

EDUCATION

What is Cooperative Education and its Purpose?

• Cooperative Education is a program that involves regularly scheduled employment, giving the student an opportunity to experience theory in practice while developing competencies through supervised training on a job related to his/her occupational or educational objective.

• The purpose of the work experience program is to integrate related academic preparation with practical work experience, thereby giving the student a better insight into his/her potential career field.

Cooperative Learning

• as “the instructional use of small groups so that students work together to maximize their own and each other’s learning

• is claimed to promote a positive attitude toward the subject matter and thus increase knowledge retention

• cooperative learning is a process meant to facilitate the accomplishment of a specific end product or goal through people working together in groups.

What are the benefits of Cooperative Education?

The StudentEarns college credit for working in the job field related to his/her career or educational goalsHas the opportunity to earn money while learningLearns what work in the related career field is all aboutIncreases employability and earning powerIncreases the potential to advance within the career fieldProvides a direct relationship between the classroom and employment

The EmployerProvides an opportunity to know potential career employeesCreates a resource of trained personnelReduces the cost of employee turnover by having trained personnel availableMakes a unique contribution to the extension of the community's educational facilitiesHas the opportunity to hire highly motivated students whose career objectives are directly related to the job

The CollegeProvides the opportunity for the college to respond to the specific needs of the communityBrings the college in closer contact with the communityGains additional insights to the classroom situation as a result of the cooperative education student maturing on the jobObtains the ability to use community facilities to provide work experience not available at the college

http://www.palomar.edu/cooped/

SOCIO-ECONOMIC AND CULTURAL UPLIFTMENT IN RURAL ENVIRONMENT (SECURE)

is an organisation of social workers committed to the cause of the marginalised & vulnerable sections of the society.

Universalisation of Elementary Education & Promotion of Child Rights Strengthening of Local Body Governance Improvement of Livelihoods through micro credit and micro-enterprises Participatory Natural Resource Management  Promotion of health sustainability and prevention of HIV /AIDS Sustainable agriculture Improving livelihoods by strengthening Traditional Milk Marketing sector Relief and rehabilitation during disasters

INDIAN FARMERS FERTILISER COOP LTD.(IFFCO): CONTRIBUTION TOWARDS LOCAL DEVELOPMENT

LOCAL DEVELOPMENT INITIATIVES BY IFFCOIFFCO SUPPORTS LOCAL DEVELOPMENT THROUGH

AGRICULTURAL DEVELOPMENT INFRASTRUCTURE DEVELOPMENT SOCIAL DEVELOPMENT ENTREPRENEURIAL DEVELOPMENT

AGRICULTURAL DEVELOPMENT ENHANCING CROP PRODUCTIVITY “SAVE THE SOIL CAMPAIGN” FOCUSSING ON REJUVENATION OF SOIL HEALTH

- Reclamation of Soil - Promotion of organic manure (Green Manure, Biofertiliser, Compost Formation)- Farm Implements for Innovative Farming(Rotavator, Seed Drill, Sugarcane Thrasher etc.)- Promotion of Balanced Nutrient Application

TRANSFER OF MODERN AGRICULTURETECHNOLOGY farmers meetings

on-farm demonstrationscrop seminars

soil testing campaigns FIELD DAYS

INFRASTRUCTURE DEVELOPMENT IN AGRICULTURE SECTOR

construction of warehouses and storage-cum-community centre. village adoption programme & integrated rural development projects (irdp)

IN NON AGRICULTURE SECTOR construction of residential houses for the poors

(gujarat earthquake victims, tsunami victims in india & nearby countries) ‰ construction of roads ‰ providing drinking water facilities ‰ assistance to school and colleges for building their

SOCIAL DEVELOPMENT relief and rehabilitation to the victims in the event of natural calamities.(flood, drought &

supply of fodder in drought areas) financial assistance for the medical treatment of needy farmers. medical & veterinary check- up camps blood donation camps and assistance to red cross society assistance/scholarship to the brilliant students

Cooperative As Democracy as Responsible Governance at Work

COOPERATIVE AS DEMOCRACY

The workers are defined as the members and owners of cooperatives. These member- owners are entitled to vote and to a share of the profits of a business.

Worker-owned

Workers own the business together. They usually invest with a buy-in amount of money when they begin working.

Worker-controlled

decisions are made democratically, by the people who do the work instead of by one person or group people that holds all the power.

* an elected board of directors

* elected managers

* management job roles

* no management at all

* decisions made by consensus (everyone agrees)

* decisions made by majority vote

* any combination of the above.

What is cooperative?

A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

Cooperative values

Self-help

Self-responsibility

Democracy

Equality

Equity

solidarity

Ethical Values

Honesty

Openness

Social responsibility

Caring for others

Cooperative Principle

Voluntary and Open Membership

Democratic Member Control

Member Economic Participation

Autonomy and Independence

Education, Training and Information

Co-operation among Co-operatives

Concern for Community

COOPERATIVE AS RESPONSIBLE GOVERNANCE AT WORK

• is a pure democratic self-governance system of managing a cooperative entity based on and in complying with the principles, values and philosophy of cooperation through the appropriate and effective organizational structure with conducive culture and ethical climate.

• Board of Directors– Directors must stay clear of conflicts of interest, so that their decisions serve the

needs of the entire cooperative, rather than specific groups within the business.– Board-Management Relations– The management of a cooperative is hired to carry out the objectives and policies

adopted by the board.– Members– Members control the cooperative by democratically electing member

representatives to a board of directors.– This member support keeps the co-op economically healthy, and allows it to

adapt to changing member needs. • Three Subsidiary Boards • Co-operative Food• The Co-operative Banking Group• Co-operative Specialist Businesses.

The Group Board is responsible for the long term success of the Group by:– Ensuring– Determining– Overseeing– Monitoring– Setting

• Cooperative Governance Framework • Cooperative Governance Framework • Four Pillars of Cooperative Governance • Four Pillars of Cooperative Governance • Teaming 

– Successfully working together to achieve common purpose.• Accountable Empowerment. 

– Successfully empowering people while at the same time holding them accountable for the power granted.

• Strategic Leadership–  Successfully articulating the cooperative’s direction/purpose and setting the

organization up for movement in this direction.• Democracy

–  Successfully practicing, protecting, promoting and perpetuating our healthy democracies.

The Role of Cooperative In Environmental Protection

Role of a Business in Community:

Take essential steps to maintain proper ecological balance Prevent environmental degradation caused due to pollution Take initiative in the conservation of scare resources Contribute in the development of socially-backward areas Make contribution to promote education and population control Improve the efficiency of business operation Contribute help in events of disasters Provide health care facilities for local community Provide equal opportunity of employment Make provisions for social accountability Maintain good relationship between business and society Cooperate with the government

Corporate social Responsibility

Corporate social responsibility may also be referred to as "corporate citizenship" and can involve incurring short-term costs that do not provide an immediate financial benefit to the company, but instead promote positive social and environmental change.

7th Principle: Concern for Community

Cooperatives work for sustainable development of their communities through policies approved by their members.

Cooperative Ethical Values

Openness

Honesty

Social Responsibility

Caring for Others