ARB management skills enhanced by DAR-CDA Partnership II

     The Department of Agrarian Reform (DAR) in Cagayan province is presently assisting 59 agrarian reform beneficiaries organizations (ARBOs) composed of more than forty agrarian reform beneficiaries’ cooperatives. One component of DAR’s assistance is the organizational management aspect composed of local capability building activities for the proper management of these farmers’ cooperatives by the Coop officers. This is being undertaken in partnership with the Cooperative Development Authority (CDA).

   Being the lead agency in cooperative development, the Cooperative Development Authority provides technical assistance to the ARB Cooperatives which include trainings, pre-registration seminars, mentoring, coaching, consultancy, bookkeeping, accounting, auditing, assistance on regulatory requirements, etc. The CDA also provides assistance for the rehabilitation of agrarian reform beneficiaries’ cooperatives.

     To strengthen this joint efforts, the DAR and the CDA entered into a Memorandum of Agreement renewing their respective commitments to promote and strengthen the ARB cooperatives and to ensure the sustainability of the cooperative enterprise activities.  The program, which is dubbed as DAR-CDA Partnership II, intends to put in place a capacity development (CAPDEV) initiative, among others, to improve service delivery to their members and positively giving impact to their business performance and operations.

   For the DAR Provincial Office of Cagayan, most of the ARBO-cooperatives have already completed the mandatory trainings for cooperatives under the partnership except for the newly organized cooperatives and the ARB organizations/associations who have recently decided to convert into agrarian reform beneficiaries’ cooperatives who need to undergo trainings on cooperative operation and management.

    These capability building activities and enterprise management trainings are significantly important at present because these ARBOs in Cagayan are recipients of farm machineries such as hand-tractors, mechanical tillers, four-wheel drive tractors, combine harvesters, hauling trucks, etc. As such, it is essential that they are equipped with the knowledge and capacities to operate these multi-million peso assets into a viable income generating business enterprises for their cooperatives.

    The present government under the Duterte Administration has made it possible for viable ARB cooperatives to access farm machineries to maximize farm productivity pursuant to the food security program and increase their income to counter the adverse effects of climate change.

   The Memorandum of Agreement seeks to renew DAR and CDA’s commitment to develop functional agrarian reform cooperatives managing profitable and sustainable enterprises in order to better serve their members and contribute in improving the quality of life of ARBs, their household and rural women. Generally, it aims to support the government’s program of reducing poverty through cooperatives.

Ivatan ARBs resort to rainwater harvesting for veggie farms

The members of the San Joaquin Agrarian ReformBeneficiaries Multi-Purpose Cooperative (San Joaquin ARB-MPC) in barangay San Antonio, Basco, Batanes have found a way to harvest and store rainwater to supply the much needed fresh water for their vegetable farms during periods where water supply is scarce such as droughts and during months of insufficient rainfall in the typhoon path island province of Batanes in northern Philippines. The situation is further complicated as the available land for these vegetable farms are also located right beside the shores of the great Pacific Ocean.

The San Joaquin ARB-MPC is an agrarian reform beneficiary organization located within the San Antonio Agrarian Reform Community (San Antonio ARC). An ARC is a barangay at the minimum or a cluster of contiguous barangays where there is a critical mass of farmers and farm workers awaiting the full implementation of agrarian reform. The farmers and the farm workers will anchor the integrated development of the area.

Rainwater harvesting is the practice of collecting rainwater for household water use, additionally, water for livestock and small irrigation. Also, it is a means to replenish groundwater levels. The common mode of rainwater harvesting is through rooftop rainwater harvesting projects. This activity addresses issues of ground water depletion brought about in part by global warming. There are reasons for ground water depletion such as: (1) Increasing demand of ground water; (2) Extracting more than recharge; (3) Reduction of recharge area due to infrastructure, road asphalting/concreting, (4) Shrinking surface water bodies; and (5) Uncertain rainfall due to climate change.

For centuries the town of Venice depended on rainwater harvesting because the lagoon surrounding Venice is made of brackish water which is not suitable for human drinking. The ancient residents of Venice developed a system of rainwater collection in order to have water to drink. As Venice acquired territories on the mainland, it started to import water by boat from local rivers.

At present, rainwater harvesting is being practiced around the world to counter the effects of climate change and has been adopted and intensified in other countries such as in Bermuda, where they have a law that requires all new construction to include rainwater harvesting adequate for the residents. The U.S. Virgin Islands also have a similar law. In Senegal and Guinea-Bissau, there are houses that are frequently equipped with homemade rainwater harvesters. In Myanmar, the groundwater is saline and communities rely on mud-lined rainwater ponds to meet their drinking water needs throughout the dry season. Some of these ponds are centuries old and are treated with great reverence and respect. In New Mexico, rainwater catchment is mandatory for new dwellings in Santa Fe. In the USA, Texas offers a sales tax exemption on the purchase of rainwater harvesting equipment. Oklahoma passed a law in 2012, to promote pilot projects for rainwater use among other water saving techniques. In Beijing, some housing societies are now adding rainwater in their main water sources after proper treatment (source: Wikipedia). 

The rainwater harvesting facility operated by the San Joaquin Agrarian Reform Beneficiaries Multi-Purpose Cooperative (San Joaquin ARB-MPC) in barangay San Antonio, Basco, Batanes was constructed through the initiative of the Local Government Unit (LGU) under the Bottom-Up Budgeting/Grassroots Participatory Budgeting (BUB-GPB) program with a cost of P1.9 million. It has provided the agrarian reform beneficiaries an opportunity to make the land productive and consequently increased their income. 

The rainwater harvesting facility helps mitigate the devastating effects of climate change and provides some relief for agrarian reform beneficiaries engaged in organic vegetable production. 

DAR Region 02 Regional Director Homer P. Tobias, CESO III, climbing to the roof to inspect the rainwater harvesting facility of the San Joaquin ARB-MPC. 

Rainwater collects on the roof and is stored in these tanks for future use. 

Freshwater always made available through the rainwater harvesting facility for vegetable farms like these situated along the Pacific Ocean. 

The P1.9 million BUB-GPB funded rainwater harvesting facility of San Joaquin ARB-MPC in barangay San Antonio, Basco, Batanes.

Agrarian Reform: Poverty incidence decreased through the Agrarian Reform Community (ARC) Strategy

A Study was conducted and it showed among others that the the Agrarian Reform Community (ARC) approach to rural development is an effective strategy to fight poverty in the countryside. The study is part of the second round of CARP impact assessment studies commissioned by the Department of Agrarian Reform (DAR). It aimed to assess the impact and gains of the program and to recommend policies, mechanisms or changes to enhance program implementation, particularly for the remaining balances in land acquisition and distribution and in expanding the reach and impact of the Agrarian Reform Community (ARC) strategy. 

The study mainly used official government databases of census and surveys of the National Statistics Office (NSO), the ARC database of the Bureau of Agrarian Reform Beneficiaries Development (BARBD) of DAR, and other administrative data from the Bureau of Agricultural Statistics (BAS) and National Statistics Coordination Board (NSCB). These databases were merged with the data on the 2006 Masterlist of the Agrarian Reform Communities, matched and analyzed. 

A rapid appraisal of five provinces was also done to examine the impact of government interventions on land markets and economic activities related to land (i.e., credit, capital accumulation, and land productivity). Results of the study show that it is the combination of possessing the land, being located in an ARC, and being in an ARC that increases a farmer household’s income and expenditure per capita and make them less likely to be poor. 

Within an ARC, there is no significant difference between ARBs and non-ARBs, thus demonstrating that returns to land ownership is significantly improved with the provision of support services. 

Furthermore, ARBs do better than non-ARBs in ARCs but both ARBs and non-ARBs in non-ARCs would have the same probability of being non-poor and they do worse than the respondents in ARCs. The benefit-cost analysis of the ARC strategy yielded a positive net present value showing that the benefits reaped from the ARC support services outweigh the cost of financing such services.  

Through the ARC strategy, poverty incidence decreased from 39.8% to 24.2% over the period 1990 and 2000. This reduction is slightly higher than that experienced by those in the non-ARC barangays, i.e., from 39.0% to 24.8% for the same period.

SOURCE: Balisacan, Arsenio, M. et al.  Study on the Impact of Comprehensive Agrarian Reform Program (CARP) on Poverty Reduction and Prospects for Long-Term Growth.  Asia-Pacific Policy Center, Diliman, Quezon City. October 2007.  PUBLISHED BY: Economic and Socio-Cultural Research Division

 Policy and Strategic Research Service, DEPARTMENT OF AGRARIAN REFORM 

Agrarian Reform Communities (ARCs) draw Convergence Services

The Department of Agrarian Reform launched the Agrarian Reform Communities (ARC) in 1993 for its key program for national development. In the past, DAR has concentrated mainly on the distribution of land to the landless farmers, while this is the core of any agrarian reform program, experience has shown that this is not sufficient to raise the quality of life of the agrarian reform beneficiaries (ARBs). And that a strategic development was created which we call the ARCs wherein DAR has focused and realigned its priorities towards the development of viable agrarian reform communities. It is the ARCs where DAR has been intensifying its interventions to increase farm production, improve household income and promote sustainable development. With ARCs, the Department, in partnership with other CARP implementing agencies, local government units (LGUs), non-government organizations (NGOs) and people’s organizations (POs) have a structure for concentrating its resources and development efforts. Development interventions focus on Land Tenure Improvement (LTI) and Program Beneficiaries Development (PBD) to ensure economic, political, environmental and socio-cultural viability of the ARCs.

In 1995, the President of the Philippines issued Administrative Order No. 194 for the adoption of the Social Reform Agenda (SRA) convergence policy and its operationalization, which is considered a milestone in the field of rural development. The Administrative Order identifies Agrarian Reform Communities, among others, as convergence areas where the various agencies and entities shall focus their resources, services and interventions. The key components of ARC development are: (1) land Tenure Improvement (LTI); Social Infrastructure and Local Capability Building (SILCAB); (3) Sustainable Area-based Rural Enterprise Development (SARED); and (4) Basic Social Services Development (BSSD) including Gender and Development.

The ARC concept: An ARC is a barangay at the minimum or a cluster of contiguous barangays where there is a critical mass of farmers and farm workers awaiting the full implementation of agrarian reform. The farmers and the farm workers will anchor the integrated development of the area.

VISION: A nation where there is equitable land ownership with empowered agrarian reform beneficiaries who are effectively managing their economic and social development for a better quality of life.

MISSION: To implement CARP through the distribution of lands and provision of support services in order to attain social equity and promote sustainable development.

The National Scene: Access to land is essential to ensure that rural growth will substantially benefit the rural poor. A highly inequitable distribution of productive assets, such as land, does not only limit the participation of the poor in production growth but also stifles the potential of the country to achieve long-term growth. For more than six decades, land reform has been (and is still) the constant battle cry in the Philippines. Agriculture contributed almost P485 billion worth of the nation’s domestic goods and services in 1997. Three-fifths (3/5) or about 49 million of the population live in the countryside and nearly half (19 million) of the labor force work in the agricultural sector.

At present, there are 6 out of very 10 Filipinos who continue to live below the poverty line due to inequality in income distribution, among others. More than half of the nation’s wealth is controlled by the richest 20% while the bottom half of the population gets only one-fifth. In 1997, 44% of the rural families are living below the poverty line especially the rice, sugarcane, coconut and corn farmers.

The Tasks: To empower the farmer-beneficiaries through the following processes: (1) landownership and control of productive resources through distribution of remaining 1.1 million hectares (nationwide) of land to farming families within five years and maintain the efficiency standard for resolving agrarian cases; (2) promoting and strengthening the social institutions at the community level and at different levels of governance by enhancing the capability of the program partners, intensifying agrarian reform beneficiaries development, consolidating existing ARCs and expanding the rural development interventions in non-ARC areas; and (3) increasing access to productive resources by working closely with the Department of Agriculture (DA), Department of Environment and Natural Resources (DENR), other line agencies and local government units (LGUs) towards a convergence of services to meet the needs of ARCs, better management and increase foreign assisted projects, establishment of a joint-venture business arrangement between farmers and agribusiness firms, meaningful partnership with autonomous societal actors in land reform and rural development undertakings.

Strategies: In the implementation of the above-mentioned tasks, the following strategies shall be utilized: (a) completion of land distribution; (b) convergence mwith DA, DENR, strategic line agencies and LGUs focusing on specific crops, commodities and integrated farming systems; (c) continuation of the ARC development by expanding to embrace all ARBs, especially those not included in the existing ARCs and convergence zones; (d) social marketing campaign; (e) organization development of the DAR bureaucracy.

The agrarian reform agenda is grounded on three equally important principles with respect to the rural sector: economic development, social justice, and political democratization. Consistent with these three distinct but related principles and congruent with DAR’s vision and mission, the implementation of the ARC Development Plan has to be enhanced and expanded to contribute to the achievement of food security, poverty reduction, and countryside development. /cds

DARPO-Cagayan is CDA-accredited training provider

TUGUEGARAO CITY, CAGAYAN-The Department of Agrarian Reform Provincial Office of Cagayan (DAR-Cagayan) is now an accredited Cooperative Training Provider after it has complied with the qualifications and requirements of the Cooperative Development Authority (CDA).

     A Certificate of Accreditation was personally delivered and handed over by CDA-Region 02 Regional Director Angelito U. Sacro  to DARPO-Cagayan represented by Provincial Agrarian Reform Officer (PARO) Virgilio M. Acasili on June 19, 2013 at the latter’s office in Tuguegarao City.
     Prior to DARPO-Cagayan’s accreditation, there are no accredited cooperative training provider the Cagayan province.

     The CDA’s accreditation program is mandated under the Cooperative Code of 2008 (Republic Act No.  9520) which aims to institutionalize the conduct of coordinated, rationalized, and standardized education and training for the cooperative and its officers and members. The law requires cooperative officers to attend and complete trainings from accredited training providers as mandatory requirement to develop their competencies in effectively performing their functions in the management of cooperatives.

     These mandatory trainings involve all cooperative officers (board member, general manager, secretary, treasurer and member of audit/election/mediation committee) to attend and complete a series of training courses within two years. The members of the Board of Directors are required to complete nine courses; general managers are required to complete eleven courses; secretaries, treasurers and members of the audit, election and mediation committees must complete four to seven trainings.

     Failure to complete the mandatory trainings will result to the coop’s being declared as non-compliant and it will lose certification of good standing (CGS). Without the CGS, a cooperative cannot secure tax exemption privileges from the Bureau of Internal Revenue (BIR) as it is one of the requirements in order be given tax exemption.  

     The accreditation of DARPO-Cagayan as a cooperative training provider shall primarily benefit thousands of agrarian reform beneficiaries who are members of agrarian reform cooperatives throughout the province of Cagayan.  /cds

Agrarian coops to get more support

The Department of Agrarian Reform (DAR) and the Cooperative Development Authority (CDA) have forged an agreement to provide more support for agrarian reform beneficiaries’ (ARB) cooperatives nationwide.

The program aims to provide strengthening and capability building trainings for members and officers of some 1,600 ARB cooperatives, re-registration and assistance for the renewal of the status as cooperatives in good standing of these cooperatives.  

This will provide ARB cooperatives with the trainings required under R.A. 9520 (Cooperative Code of 2008) for officers and members of cooperatives. It will also strengthen farmers’ cooperative as instruments of equity, social justice and economic development as expressed the in Philippine Constitution.

The DAR and CDA will also assist new farmers’ cooperatives in the preparation of the documents needed for registration and will help them improve their operations and preserve and build up their capital.

The agreement between DAR and CDA was earlier disclosed in Cagayan De Oro City during the 2012 National Cooperative Summit wherein DAR has committed to provide funding for trainings for ARB cooperatives to be primarily implemented by the CDA. It is also a part of the agreements reached during such summit, that is, to mainstream the farmer-beneficiary cooperatives into the cooperative movement. /cds

Philippine Cooperative Sector: Some vital stats

CDA Chairman Dr. Emmanuel Santiaguel, PhD delivering the State of the Cooperatives Address (SOCA).

1.    There are 11.7 million Filipinos who are members of cooperatives, or about 10% of the population as of September 30, 2012; 

2.    There are 22,133 registered cooperatives  at present, the rate of increase had dropped compared to previous years because of cooperatives branching out  instead of new cooperatives being registered. The Cooperative Development Authority (CDA) issued 134 Certificates of Authority and Recognition to coop branches and satellite offices nationwide;

      3.    An estimated P160,986,472,748 volume of business was generated by the cooperative sector;

      4.    Almost 76% of cooperatives  are classified as Micro Scale, with assets of not more than three (3) million pesos and 16.16% are classified as Small Scale;

      5.    Only 6.74% of the cooperatives belong to the Medium Scale;

      6.    About 334 (1.62%)registered cooperatives belong to the Large Scale;

      

      7.    The combined Large Scale and Medium Scale cooperatives contributed a total of P122,775,397,027 volume of business and total assets of P108,637,570,716. This means that majority of the cooperatives are those that have assets of not more than three (3) million, prone to financial difficulties and with little or no capacity to expand to meet the needs of the their members-clients;

 8.    More than 65% of registered cooperative are multi-purpose;

 9.    About 11.23% are engaged in credit and lending;

     10.  More than 5% are service and producer cooperatives;

      11.  There are 4.96% consumer cooperatives;

     
      12.  There are 3.59% marketing cooperatives and the rest represent 1% of the total;

13.  In 2011, the cooperative sector generated 141,260 indirect and 201,225 direct employments;

      14.  As of July 2012, the Cooperative Development Authority (CDA) have 100% active Regional CDC, 63% from Provincial Council, City Council with 80.1% and Municipal with only 38.91% Council who are actively participating with our cooperative development programs;

      15.   The CDA has received only a total of 11,944 CAPRs and only 11, 692 coops submitted Audited Financial Statements. (49% of the cooperatives has yet to submit these reports);

     16.   As of September 2012 the CDA has only 5,191 approved ACBL amendments out of 8,023 applications received; 

     17.   The cooperative sector has available services of only 831 total accredited individual CPAs and 87 firms nationwide that will handle the audit of the financial statements of the cooperatives; and

      18.   The amendment of CDA Charter and the mandatory creation of the Cooperative Development Office in the Local Government Units is still being scrutinized and deliberated upon on its 3rd and final reading in congress. 

Source: State of the Cooperative Address (2012 National Cooperative Summit)  /cds

Cooperatives: A New Perspective

I have always believed that one way for the Filipinos to rise from poverty is to be an entrepreneur. But I always hear that a major hindrance to becoming an entrepreneur is the perennial lack of capital for those who are interested to engage in some kind of business enterprise. Maybe unknown to them is the alternative of associating or organizing a pool of people who are similarly interested to pursue a business through a cooperative enterprise. In this way, a core number of individuals could pool money, human resources and talent to build capital, and work together to produce more goods and increase income.

            There are more than twenty thousand cooperatives operating in the Philippines as of October 2011 with a total membership of more than eleven million people composed of farmers, fisherfolk, women, workers, vendors, teachers, government employees, the military, rebel-returnees, and from other sectors who are mostly poor and disadvantaged but they believe in cooperativism and seriously desire to build a better life for them and their families through association and cooperation. These cooperatives in the Philippines have a combined assets of PHP158.6 billion.

            On a global perspective, reports from the International Cooperative Alliance (ICA) indicate that over one billion people are members of cooperatives. In Asia, there are 45.3 million members of cooperatives. In Indonesia, 27.5% of families are members of cooperatives. In Japan, 33% of families are members of cooperatives. In Singapore, 50% of the population are members of cooperatives. Membership in cooperatives have increased because of the benefits they derive from being members.

            The contributions of cooperatives into the national economy are also steadily increasing. Agricultural cooperatives in Japan, for instance, agricultural cooperatives generate outputs equivalent to US$90 billion. This may be due to the fact that 91% of the farmers are members of cooperatives. In South Korea, 90% of farmers are members of agricultural cooperatives which have contributed to an output of US$11 billion. Fishery cooperatives in South Korea have a market share of 71%. In Vietnam, cooperatives contribute 8.6% of the country’s gross domestic product. In the Philippines, the cooperative sector is still a growing sector which contributed 4.2% of the country’s gross regional product in 2007. Cooperatives contribute generating and maintaining employment. Worldwide, around one hundred million jobs are provided by cooperatives, which is 20% more than multinational business enterprises.   In the United States, 30,000 cooperatives provide more than 2 million jobs. In Canada, over 155,000 are employed by the sector. In Indonesia, cooperatives provide jobs to 288,600 individuals. Philippine cooperatives, on the other hand, provided jobs to 102, 977 people in 2007, about 0.30% of the country’s labor force. 

            When I attended the Cooperative Regional Conference in Echague, Isabela sometime in  2012, I was awed by the large number of people who are active members of cooperatives in the Cagayan Valley Region. During that meeting, we were provided with information about what is actually happening in Congress, about the efforts and bills introduced to harness and support the collective efforts to strengthen cooperatives of agrarian reform beneficiaries (ARBs), of agricultural cooperatives, and to consolidate these cooperatives to maximize benefits from economies of scale. There was also a suggestion for the cooperative members to support Senatorial candidates  are sympathetic to the cooperative sector (although in hushed tones).

            However, there are were issues that came out, specially local and national officials who are stifling the growth of cooperatives by disregarding or refusing to honor the tax benefits and privileges that cooperatives are expressly entitled to under the laws of the Philippines. Some agencies of the government like the Bureau of Internal Revenue (BIR) and some officials of Local Government Units (LGUs) have various interpretations of the law and deliberately make it difficult for cooperatives to obtain the Tax Exemption Certificate.

            While it is clear that the spirit of the law is for cooperatives to be given preferential tax treatment as expressed in the law, that is, Republic Act No. 6938, now Republic Act No. 9520, this is not happening in some parts of the Philippines. Even the Supreme Court, in the cases that it has decided ruled that, “cooperatives, including their members, deserve a preferential tax treatment because of the vital role they play in the attainment of economic development and social justice. Thus, although taxes are the lifeblood of the government, the State’s power to tax must give way to foster the creation and growth of cooperatives.”  Justice Isagani A. Cruz, as quoted by Rep. Jose R. Ping-Ay in one of his speeches in Congress, said that: “The power of taxation, while indispensable, is not absolute and may be subordinated to the demands of social justice.” 

         After all, it is true that sovereign power resides in the people, and all government authority emanates from them. Is it really? cds