COOPERATIVE MARKETING MODULE

Roel P. Dolaypan Jr.

Module 2: The Cooperative Ecosystem

A. The Rochdale Story: Pioneering the Cooperative Movement

Introduction
The Rochdale Society of Equitable Pioneers, founded in 1844 in Rochdale, England,
is often considered the birthplace of the modern cooperative movement. This
pioneering group of individuals laid the foundation for cooperative principles and
practices that continue to influence cooperative societies worldwide.

Context of the Industrial Revolution

The 19th century witnessed the profound social and economic changes of the
Industrial Revolution. Workers faced harsh working conditions, exploitation, and
limited access to affordable and quality goods. In this backdrop, the Rochdale
Pioneers emerged with a vision to address these issues through cooperation.

Formation of the Rochdale Society

In 1844, 28 weavers and other artisans came together to establish the Rochdale
Equitable Pioneers Society. They aimed to create a cooperative store where members
could buy goods collectively, ensuring fair prices and eliminating the middleman's
exploitation. Each member contributed a small sum to the cooperative capital.

Cooperative Principles
The Rochdale Pioneers formalized a set of guiding principles that became the
cornerstone of the cooperative movement. These principles, including open
membership, democratic control, distribution of surplus in proportion to transactions,
and concern for the community, have since evolved into the internationally recognized
Rochdale Principles.

The Rochdale Principles

✓ Open and Voluntary Membership: Membership is open to all, without
discrimination.
✓ Democratic Control: Decision-making is based on the principle of one member,
one vote.
✓ Distribution of Surplus: Profits are distributed among members based on their
transactions with the cooperative.
✓ Payment of Limited Interest on Capital: Capital invested by members earns
limited interest.
✓ Political and Religious Neutrality: Cooperatives remain independent from
political and religious influence.
✓ Cash Trading: Goods are sold for cash or its equivalent.
✓ Promotion of Education: Cooperatives provide education and training for
members and the community.

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Success of the Rochdale Cooperative

The Rochdale Society's cooperative store achieved remarkable success. The
principles of honesty, transparency, and fair practices attracted more members, and
the cooperative model proved financially viable. This success inspired the replication
of cooperative societies across the United Kingdom and eventually globally.

Impact on Cooperative Movement

The Rochdale Pioneers set a precedent for the cooperative movement, inspiring the
establishment of numerous cooperative enterprises worldwide. Their principles
became a guide for cooperative societies, emphasizing ethical business practices,
democratic governance, and community development.

Legacy and Global Influence

The Rochdale story left an indelible mark on the cooperative movement. Cooperative
societies in various sectors, including agriculture, finance, and housing, have adopted
the Rochdale Principles. The International Cooperative Alliance (ICA) recognizes these
principles as the foundation of cooperatives globally.

B. Cooperative Movement: Philippine Historical Context

Nurtured by the rich soil of resilience and community spirit, the Philippine cooperative
movement boasts a profound history intertwined with visionaries like Jose Rizal and
the transformative contributions of Bulacan governors. This narrative unveils a journey
of collective dreams for a more just and equitable future, woven from the threads of
history, individual contributions, and the unwavering spirit of ordinary Filipinos.

Seeds of Cooperation: Rizal's Vision Beyond Independence

While best known for his fight for Philippine independence, Rizal's vision extended
beyond political freedom. He envisioned a society empowered by collaboration and
mutual aid, evident in his writings advocating for "mutual aid" and "national solidarity"
(Go, 2011)1. Rizal's time in Dapitan wasn't just a period of exile; it was a laboratory for
his social ideals. He established a school and a communal farm, both operating on
cooperative principles, and even founded "La Sociedad de los Abacaleros," a
cooperative store for abaca producers (Fernandez, 1998). Although short-lived, these
initiatives laid the groundwork for the cooperative movement that would take root
across the archipelago.

From Seeds to Saplings: Bulacan's Trailblazing Governors

Following Rizal's path, early Bulacan governors played a crucial role in nurturing the
movement. Teodoro Sandiko, inspired by European cooperative models, championed
the Rural Credit Act of 1908, paving the way for future legislation supporting

1
Go, C. B. (2011). Jose Rizal's social thought: A historical perspective. In L. H. Lopez, & M. H. Lopez (Eds.), Jose Rizal: History, myth, and
national identity (pp. 123-143). Ateneo de Manila University Press.

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cooperatives (Gonzales, 2000) 2. Later, Claro M. Recto, during his term as governor
(1935-1940), implemented policies and provided loans and technical assistance that
spurred the growth of cooperatives in Bulacan, becoming a model for other regions
(Roper, 1970).

C. 7 Cooperative Principles (Republic Act No. 9520)

The Cooperative Code of the Philippines, Republic Act No. 9520, recognizes and
adopts the internationally recognized cooperative principles. These principles provide
the framework for the establishment and operation of cooperatives in the country. Let's
discuss each of the seven cooperative principles with examples to illustrate their
application in the Philippine cooperative context:
1. Voluntary and Open Membership: Cooperatives in the Philippines operate on the
principle that membership is open to anyone willing to accept the responsibilities
of membership without any unjust discrimination. For instance, the "Sari-sari Store
Owners Cooperative" allows all small store owners in a community to join,
irrespective of their background or affiliations.
2. Democratic Member Control: Cooperative decision-making is based on a
democratic process, with each member having equal voting rights. An example is
the "Farmers' Marketing Cooperative," where decisions about what crops to plant,
when to harvest, and pricing strategies are made collectively by the farmer
members through a democratic voting process.
3. Economic Participation by Members: Members contribute equitably to, and
democratically control, the capital of their cooperative. The economic benefits are
shared in proportion to each member's transactions with the cooperative. In a
"Credit Cooperative," members who contribute more to the cooperative's capital
receive higher interest on their savings and favorable terms on loans.
4. Autonomy and Independence: Cooperatives are autonomous, self-help
organizations controlled by their members. They have the freedom to enter into
agreements with other organizations, including governments, as long as such
agreements are in line with cooperative principles. An example is a "Fishermen's
Cooperative" that independently negotiates with a local government to secure
favorable fishing rights for its members.
5. Education, Training, and Information: Cooperatives in the Philippines promote
education and training for their members, board of directors, and employees to
contribute effectively to the development of their cooperatives. The "Consumer
Cooperative University" offers workshops and training sessions for its members to
enhance their financial literacy and cooperative management skills.
6. Cooperation among Cooperatives: Cooperatives serve their members most
effectively and strengthen the cooperative movement by working together. An
example is the collaboration between a "Farmers' Cooperative" and a "Credit

2
Gonzales, L. M. (2000). The history and development of the cooperative movement in the Philippines. Philippine Journal of Public
Administration, 44(4), 381-412.

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Cooperative." The Farmers' Cooperative supplies agricultural products, and the

Credit Cooperative provides financial assistance to support the farmers' activities.
7. Concern for Community: Cooperatives work for the sustainable development of
their communities through policies approved by their members. A "Housing
Cooperative" may prioritize community development projects, such as building a
local school or health center, to improve the overall well-being of its members and
the surrounding community.

D. Values of Cooperatives
1. Self-Help and Self-Responsibility: Members are encouraged to take initiative and
responsibility for their economic and social well-being.
2. Democracy and Equality: Cooperative activities are conducted with fairness,
impartiality, and respect for the rights of all members.
3. Equity and Solidarity: Cooperatives embody the principle of equity, ensuring fair
distribution of benefits and responsibilities among members.
4. Social Responsibility and Concern for Others: Cooperatives have a social mission
beyond profit-making, actively contributing to the development of their
communities.
5. Honesty and Transparency: Cooperatives operate with honesty and transparency
in all their dealings, ensuring that members are well-informed about the
cooperative's activities.
6. Equality of Women and Men: Cooperatives promote gender equality, ensuring that
women and men have equal opportunities and representation.
7. Voluntary and Open Membership: Members voluntarily join and participate in the
cooperative, fostering a sense of inclusivity.
8. Educational, Training, and Information: Cooperatives prioritize education and
training to enhance the capabilities of their members.
9. Cooperation among Cooperatives: Cooperatives actively collaborate and support
each other to strengthen the cooperative movement.
10. Professionalism: Cooperatives conduct their operations with professionalism,
adhering to ethical standards and principles of good governance.

E. Type of Cooperatives in the Philippines

a. Credit Cooperatives: Credit cooperatives serve as member-owned and regulated
financial institutions, offering a safe and ethical alternative to traditional banks in
the Philippines. These cooperatives pool resources from members to extend loans
for business ventures, education, healthcare, and other needs, often at lower
interest rates and fees than commercially available options. By eliminating profit
motive and prioritizing financial inclusion, credit cooperatives empower
underserved communities and promote economic mobility across the archipelago.
Example: Negros Oriental Community Cooperative (NOCCCO): Founded in
1979, NOCCCO serves as a leading credit cooperative in the Philippines,
reaching over 200,000 members across Negros Oriental and neighboring

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provinces. The cooperative offers various loan products for micro, small, and
medium enterprises, fostering financial independence and entrepreneurial spirit
in rural communities (CDA Annual Report, 2022).
b. Consumer Cooperatives: Consumer cooperatives are member-owned
businesses that provide quality goods and services at competitive prices while
prioritizing local sourcing and ethical practices. By pooling resources and
negotiating bulk discounts, these cooperatives offer Filipinos benefits like lower
prices for daily necessities, access to diverse and fresh produce, and a sense of
ownership and community engagement.
Example: Suyoc Farmers' Multi-Purpose Cooperative (SFMPC): This
cooperative in Davao Oriental operates a consumer store offering farm-fresh
produce directly from member farmers. Members receive discounts on
purchases, while the cooperative promotes sustainable agricultural practices
and strengthens local food systems (PCIJ, 2023).
c. Producer Cooperatives: Producer cooperatives are formed by Filipinos directly
involved in production, such as farmers, fisherfolk, and artisans. These
cooperatives pool resources, expertise, and marketing power to collectively
improve production efficiency, access better market opportunities, and negotiate
fair prices for their products or services. This collaborative approach benefits
members by increasing income, reducing risks, and promoting sustainable and
inclusive economic development.
Example: Cordoba Weavers' Association (COAWEA): This producer cooperative
in Cebu groups skilled female weavers, creating handwoven textiles recognized
globally for their quality and unique designs. COAWEA provides members with
technical assistance, marketing support, and fair wages, empowering women
and preserving traditional craftsmanship (CDA Case Study, 2021).

d. Marketing Cooperatives: These cooperatives link producers directly to

consumers, eliminating middlemen and maximizing profit for their members.
Example: Pasig City Vegetable Traders Cooperative (PCVTC) connects farmers
with urban markets, ensuring fair prices for both producers and consumers
(PCA, 2023).
e. Service Cooperatives: These cooperatives provide essential services like
transportation, cleaning, or tourism, often in underserved communities.
Example: Negros Occidental Transport Cooperative (NOTCO), known for its
jeepney operations, provides reliable and affordable transportation in Bacolod
City (DA, 2022).
f. Multi-Purpose Cooperatives: These cooperatives offer a diversified range of
services or products, from agriculture and retail to housing and healthcare.
Example: San Ildefonso Multi-Purpose Cooperative (SIMPC) in Bulacan
exemplifies this, providing members with agricultural inputs, consumer goods,
and healthcare services (CDA Annual Report, 2022).
g. Advocacy Cooperatives: These cooperatives champion specific causes,
promoting social justice, environmental protection, or consumer rights.

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Example: National Federation of Sugarcane Planters, Inc. (NFSPI) advocates

for the welfare of sugarcane farmers, providing legal support and market access
(NFSPI website, 2023).
h. Agrarian Reform Cooperatives: These cooperatives support land reform
beneficiaries through shared resources, training, and market linkages.
Example: Hacienda Dolores Agrarian Reform Cooperative (HDARC) in
Pampanga serves as a model, assisting farmers in land management,
agricultural technology, and cooperative governance (DAR Case Study, 2021).
i. Cooperative Banks: These member-owned financial institutions offer banking
services tailored to cooperative needs, such as microloans and business banking.
Example: The Land Bank of the Philippines exemplifies this, offering exclusive
programs and financial services to empower cooperatives nationwide
(LandBank website, 2023).
j. Dairy Cooperatives: These cooperatives support dairy farmers by pooling
resources for milk processing, marketing, and collective bargaining.
Example: Milkmasters Dairy Cooperative (MDC) in Davao del Sur demonstrates
this, improving member income and contributing to the Philippines' dairy industry
development (DA website, 2023).
k. Education Cooperatives: These cooperatives offer affordable and accessible
education through member-owned and managed schools or learning centers.
Example: Teacher-Parent Cooperative Schools Partnership (TCPSP) program
exemplifies this, empowering communities to establish and run their own schools
(DepEd Order No. 14, s. 2020).
l. Electric Cooperatives: These member-owned cooperatives distribute
electricity in rural areas, ensuring access to a vital service often neglected
by large companies.
Example: Benguet Electric Cooperative (BENECO) serves as a successful case
study, delivering reliable and affordable electricity to mountain communities in
Northern Luzon (BENECO website, 2023).
m. Financial Service Cooperatives: These cooperatives offer a diverse range of
financial services beyond banking, such as insurance, remittance, and savings
plans.
Example: Cooperative Insurance System of the Philippines (CISCO) exemplifies
this, providing accessible and affordable insurance products to cooperative
members nationwide (CISCO website, 2023).
n. Fishermen Cooperatives: These cooperatives empower fisherfolk by pooling
resources for boat maintenance, gear acquisition, and collective bargaining for fair
fish prices.
Example: General Santos City Tuna Fishermen's Cooperative Association
(GESCATFA) stands as a prime example, improving members' livelihoods and
promoting sustainable fishing practices in the tuna industry (CDA Case Study,
2020).
o. Health Services Cooperatives: These cooperatives provide affordable and
accessible healthcare services in underserved communities.

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Example: Rural Health Services Cooperative Movement of the Philippines

(RHSCMP) exemplifies this, operating rural health centers and clinics staffed by
medical professionals dedicated to community well-being (RHSCMP website,
2023).
p. Housing Cooperatives: These cooperatives provide affordable housing solutions
for members, particularly low-income families.
Example: National Federation of Housing Cooperatives in the Philippines
(NFHCP) serves as an umbrella organization, advocating for and supporting
housing cooperatives nationwide (NFHCP website, 2023).
q. Insurance Cooperatives: These cooperatives offer member-owned and
managed insurance products, tailoring coverage to meet the specific needs of their
communities.
Example: The Cooperative Insurance System of the Philippines (CISCO),
previously mentioned, is a leading example, providing affordable and accessible
insurance for individuals and cooperatives across the country.
r. Transport Cooperatives: These cooperatives provide essential transportation
services, often in rural areas or underserved communities.
Example: The Negros Occidental Transport Cooperative (NOTCO), previously
mentioned, is a prime example, ensuring reliable and affordable public
transportation in Bacolod City.
s. Water Service Cooperatives: These cooperatives manage and distribute water
resources in rural communities, ensuring access to clean water for members.
Example: The Bohol Island Water Development Cooperative (BIWDC) serves as
a model, providing clean and safe drinking water to over 50,000 households in
Bohol island (CDA Case Study, 2019).

t. Workers Cooperatives: These cooperatives are owned and operated by their

workers, sharing profits and decision-making.
Example: The Laundry Workers' Cooperative Society in Manila (LWCSM)
exemplifies this, empowering laundry workers and promoting fair labor practices
within the industry (CDA Case Study, 2018).
u. Other Types of Cooperatives: The Cooperative Development Authority (CDA)
recognizes various other types of cooperatives catering to specific needs and
contexts. These include handicraft cooperatives, tourism cooperatives, youth
cooperatives, and more. Exploring these diverse forms further reveals the
immense potential of the cooperative movement to address various challenges
and foster development across the Philippines.

F. Cooperative Marketing Federations: Bridging the Gap

Cooperative marketing federations play a crucial role in linking individual cooperatives
with wider markets and facilitating collective action. These federally-registered
organizations, formed by member cooperatives, perform several essential functions:

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a. Market Access and Expansion: Federations aggregate the production and

marketing power of individual cooperatives, enabling them to access larger
markets, negotiate better prices, and compete effectively with larger businesses.
For instance, the Central Luzon Rice Millers' Federation (CLRMF) aggregates rice
production from various cooperatives in Central Luzon, securing lucrative
contracts with major rice buyers and ensuring stable income for its members (CDA
Case Study, 2022).
b. Product Consolidation and Branding: Federations can pool resources to
standardize and improve product quality, develop consistent branding, and
implement joint marketing campaigns. The Negros Island Integrated Processing
Center (NIIPC) exemplifies this, processing and branding cacao beans from
member cooperatives under the "[Link]" brand, elevating the value of their
products and reaching wider markets (CDA Case Study, 2020).
c. Technical Assistance and Capacity Building: Federations provide training and
support to member cooperatives in areas like production techniques, financial
management, and marketing strategies. The National Federation of Sugarcane
Planters, Inc. (NFSPI) offers technical assistance on sustainable farming practices
and market analysis to its member cooperatives, empowering them to navigate the
sugar industry efficiently (NFSPI website, 2023).
d. Policy Advocacy and Lobbying: Federations represent the collective voice of their
members to advocate for policies that benefit the cooperative sector. The
Cooperative Development Authority (CDA) facilitates dialogue between
federations and the government, ensuring that cooperative concerns are heard
and addressed (CDA website, 2023).

G. The Government's Supporting Hand: Nurturing Growth

The Philippine government recognizes the vital role of cooperatives in achieving
inclusive development and poverty reduction. Several initiatives exemplify this
support:
➢ Financial Assistance: The CDA Financial Assistance Program (FAP) provides
grants and loans to cooperatives for capacity building, infrastructure development,
and marketing initiatives. This financial support empowers cooperatives to
overcome resource constraints and accelerate their growth (CDA website, 2023).
➢ Technical Support: The CDA Technical Assistance and Training Services (TATS)
offer training programs and expert guidance to cooperative members on various
aspects of cooperative management, financial literacy, and marketing strategies.
This capacity building strengthens cooperatives and enhances their long-term
sustainability (CDA website, 2023).
➢ Policy Initiatives: The Philippine Development Plan (PDP) identifies the
cooperative sector as a key driver of inclusive growth and outlines specific policies
to support its development. For instance, the Cooperative Development Authority
Charter Amendments of 2022 aim to streamline regulatory processes and
empower the CDA to better support the cooperative sector (PCIJ, 2022).

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H. Navigating Challenges and Embracing Opportunities

Despite its immense potential, the Philippine cooperative sector faces several
challenges:
✓ Limited Access to Capital: Many cooperatives struggle to secure financing for
expansion and modernization due to stringent collateral requirements and lack of
awareness of available funding options. This hinders their ability to compete
effectively with larger businesses (CDA Annual Report, 2022).
✓ Weak Governance and Management: Some cooperatives grapple with internal
challenges like inadequate leadership skills, financial mismanagement, and lack
of member participation. These factors can affect their operational efficiency and
long-term viability (World Bank, 2018).
✓ Market Competition: Cooperatives may face stiff competition from established
businesses with superior marketing resources and economies of scale. This can
make it difficult for them to penetrate new markets and secure profitable market
share (Asian Development Bank, 2019).

However, amidst these challenges, the Philippine cooperative sector also harbors
promising opportunities:
✓ Growing Consumer Demand for Ethical Products: Consumers are increasingly
seeking ethically sourced and sustainable products, creating an advantageous
market for cooperatives committed to fair trade practices and environmental
responsibility (CDA Marketing Survey, 2021).
✓ Technological Advancements: Digital technologies offer new avenues for
cooperatives to reach wider markets, improve production efficiency, and enhance
communication with members. Embracing digital solutions can propel their growth
and competitiveness (PCIJ, 2021).
✓ Government Commitment: The Philippine government's continued support for the
cooperative sector, through policy initiatives, financial assistance, and capacity
building programs, creates a conducive environment for cooperative growth and
development (CDA Annual Report, 2022).

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Quiz 2: The Cooperative Ecosystem

Name: ________________________ Score: ___________________

1. Where was the Rochdale Society of Equitable Pioneers founded?

a. Paris
b. London
c. Rochdale
d. Manchester
2. What historical period prompted the emergence of the Rochdale Pioneers?
a. Renaissance
b. Industrial Revolution
c. Middle Ages
d. Victorian Era
3. Which principles are considered the cornerstone of the cooperative movement, as
formalized by the Rochdale Pioneers?
a. The Paris Principles
b. The Manchester Principles
c. The Rochdale Principles
d. The London Principles
4. What is the democratic principle in cooperatives based on?
a. Wealth
b. Land ownership
c. One member, one vote
d. Age
5. In the Philippine context, who envisioned a society empowered by collaboration and
mutual aid?
a. Jose Rizal
b. Andres Bonifacio
c. Emilio Aguinaldo
d. Antonio Luna
6. Which Bulacan governor championed the Rural Credit Act of 1908, supporting
cooperatives?
a. Claro M. Recto
b. Teodoro Sandiko
c. Manuel Roxas
d. Sergio Osmena
7. How many cooperative principles are recognized in Republic Act No. 9520 in the
Philippines?
a. Five
b. Seven
c. Ten
d. Twelve

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8. Which cooperative principle emphasizes the fair distribution of benefits based on

transactions?
a. Autonomy and Independence
b. Economic Participation by Members
c. Cooperation among Cooperatives
d. Concern for Community
9. Which type of cooperative is known for offering microloans and business banking
services?
a. Consumer Cooperative
b. Credit Cooperative
c. Producer Cooperative
d. Advocacy Cooperative
10. What do Cooperative Marketing Federations primarily facilitate?
a. Internal governance
b. Market access and expansion
c. Product branding
d. Political lobbying
11. Which government initiative provides grants and loans to cooperatives for capacity
building?
a. Technical Assistance and Training Services (TATS)
b. Cooperative Development Authority Charter Amendments
c. Philippine Development Plan (PDP)
d. Financial Assistance Program (FAP)
12. What significant role do cooperative marketing federations play in the cooperative
ecosystem?
a. Product manufacturing
b. Facilitating collective action
c. Internal governance
d. Legal representation
13. What is a common challenge faced by many cooperatives in the Philippines?
a. Excessive access to capital
b. Strong governance and management
c. Weak market competition
d. Limited access to capital
14. What opportunity arises from consumers seeking ethically sourced and sustainable
products?
a. Limited market demand
b. Technological challenges
c. Growing consumer demand
d. Reduced government support
15. How do cooperatives benefit from embracing digital technologies?
a. Increased market competition
b. Reduced production efficiency

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c. Enhanced communication and growth

d. Limited market access
16. What type of cooperative provides affordable and accessible education?
a. Credit Cooperative
b. Education Cooperative
c. Producer Cooperative
d. Housing Cooperative
17. Which cooperative type is involved in distributing electricity in rural areas?
a. Energy Cooperative
b. Electric Cooperative
c. Housing Cooperative
d. Water Service Cooperative
18. What does the Cooperative Insurance System of the Philippines (CISCO) specialize
in?
a. Credit services
b. Insurance products
c. Education and training
d. Housing solutions
19. Which cooperative provides essential transportation services in Bacolod City?
a. Negros Occidental Transport Cooperative (NOTCO)
b. Pasig City Vegetable Traders Cooperative (PCVTC)
c. San Ildefonso Multi-Purpose Cooperative (SIMPC)
d. Hacienda Dolores Agrarian Reform Cooperative (HDARC)
20. What is the primary aim of Advocacy Cooperatives?
a. Profit-making
b. Social justice and advocacy
c. Market competition
d. Product branding and consolidation

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