Bread by Vader (rommelortega@gmail.com)

Cooperative: the Future’s Business Model

Even before the July 04 celebrations, I already checked what to write that would resonate to our constituencies. I am thinking about what or who carries my values or at least that of the organization that I am with. There seems to be many topics but the choices I have to narrow down. I came to the conclusion that Cooperatives development in the United States would be a good topic to write and study, even to emulate.

In perspective, the first 100 cooperatives in the United States garnered a revenue of US$319 billion for fiscal year 2022 up 25% from 2021. In the Philippine economy comparison, it is 18.502 trillion pesos equivalent. Bigger than our cumulative debts of around 15 trillion pesos. This revenue of the US cooperatives was made in only a year! The potential for cooperatives is huge – we only have to administer and manage the organizations well and carry the values of the international and local pioneers into our daily transactions and behaviors. The US$319 billion was little less than three times of the US$110 billion total exports of the Philippines in the fiscal year 2022 (OEC World).

Cooperatives in the Philippines have Php 227.6 billion revenues for 2023 eclipsing the 2022 revenue of Php 154.8 billion or a total of 47.09% increase from previous year (treasury.gov.ph). 

History of Cooperatives in the United States: An Overview

Cooperative organizations have played a significant role for some in American history, addressing economic and social needs. Let’s delve into the fascinating journey of cooperatives in the U.S., including their social responsiveness and the pivotal role of the Cooperative League of the United States of America (CLUSA).

European Influences and Early Roots

Cooperative organizations emerged early in the United States, influenced by European settlers’ heritage and the practical need for cooperative solutions in rural areas. The Industrial Revolution in England (1750-1850) triggered upheavals, pushing workers from small home-based enterprises into cities with harsh working conditions. Simultaneously, changes in land tenure patterns displaced small farmers from rural areas.

Inspired by trade guilds and mutual aid societies, pioneers like Robert Owen (1771-1858), a Welshman and  considered as the father of the cooperative movement, and Charles Fourier (1772-1837) French born, advocated for cooperative solutions. William King (1786 – 1865), a British physician, championed consumer cooperatives, emphasizing democratic governance and public education about cooperatives. The Rochdale Society of Equitable Pioneers (England), organized in 1844, codified cooperative principles that continue to shape cooperative practice today.

Economic and Social Care

Cooperatives were seen as a path toward a more socially responsive economy. The Cooperative League of the United States of America (CLUSA) was established in 1916 with a broad cooperative agenda. CLUSA provided assistance to new cooperatives and actively lobbied for favorable state and federal legislation. It aimed to promote cooperative principles and foster cooperative development across various sectors. They envision a better world for all inhabitants of the earth. 

Notable Philanthropic Help

In 1944, the Cooperative Development Foundation (initially the Freedom Fund of CLUSA) was formed to provide war relief through cooperative and self-help initiatives in Europe. It launched the Cooperative American Relief Everywhere (CARE) too and made a grant of US$30,000 to alleviate the conditions of war-weary Europe. In current money, it would be around US$536,000 or in Philippine pesos (29 million). 

CLUSA promotes the cooperative agenda and educates people on the benefits of having cooperatives in our or particularly the US economy. It nurtures cooperatives and advocates for shared prosperity among populations. Democratic governance is also among its core tenets and their efforts made many secure their economic prosperity. 

Current Times

In the US today, with the changes in social and economic structures, people are looking for a more sustainable and worker-friendly business models. The cooperative business design is one that people are getting interested into. CLUSA is not late but one of the most relevant players in making communities become better in inclusiveness. 

Cooperatives in the Philippines

Cooperative movement in the Philippines is dynamic and rapidly growing with people interested in self-help, common-wealth and democratic or participative governance. The cooperatives foster common objectives in environmental, social and governance issues. They also advocate for sustainable business activities. 

The sunshine will continue to smile for the Philippine cooperatives as our local cooperative banks earned around Php 47 (46.92) billion in fiscal year 2023 alone (Statista). The traction of cooperative banks in the country is also a good gauge that the economy could be resilient to external and internal shocks. 

In my opinion, the issue of consolidation of cooperatives in the Philippines would be a bad recipe for disaster for many in the business model as expertise will be relegated to secondary priority. But in a spirit of fairness, there are four aspects which should be looked into. According to Co-pilot (Microsoft), they are:

1. Efficiency or Economy of Scale: Consolidation could lead to larger, more potent cooperatives. Pooling resources and expertise might enhance efficiency, bargaining power, and competitiveness.
2. Loss Focus in their local economy: On the other hand, consolidation might dilute the community-oriented nature of most cooperatives. Local needs and unique conditions could be overlooked.
3. Possibility of Monopoly: If consolidation isn’t well-regulated, it could create monopolies, stifling competition and limiting choices for members.
4. Good Governance: Managing larger cooperatives requires robust governance structures. If not handled well, conflicts and mismanagement could arise.

Moving forward, there are cooperatives that did not survive the initial stages but people should be encouraged by the ones that succeeded. The support of the government is not lacking, many in the community just simply do not know. For example, pre-bidding requirements in government procurements do not make them a requisite if you are a cooperative. In my research, I hope it still stands: In the Philippines, cooperatives are exempt from pre-qualification bidding requirements when transacting business with the Government of the Philippines, its political subdivisions, or any of its agencies or instrumentalities, including government-owned and controlled corporations. This exemption is granted under Article 62, paragraph 10 of Republic Act No. 9520, also known as the “Philippine Cooperative Code of 2008”. 

For your help or positive actions for our communities, you are welcome to participate via our political party (about to be registered): Partido Makakalikasan Ng Pilipinas (Nature Party Philippines). You may email us at natureparty.ph@gmail.com or message us at 0995-2026-804. If you cannot directly join, you may become a member or you can help us financially via tithing or political donations: Gcash: +63921-266-1592.

For NGO work, for example, in the establishment of Green Commune, you can text 0995-2026-804 or email us at makakalikasan.organization@gmail.com.

For help in establishing our Cooperative, kindly text us at 0995-2026-804 or email us at makakalikasan.marketing.coop@gmail.com. We are continuously looking for green products and services to market. If you have one, do not hesitate to contact us. 

Lastly, we consider the Church’s and Pope Francis’ Laudato Si as part of our guiding principles.