BIBLIOGRAPHY BAGUISTA, TERMA D. APRIL 2007....
BIBLIOGRAPHY
BAGUISTA, TERMA D. APRIL 2007. Lusod Agrarian Reform Community
Multi-purpose Cooperative: A Documentation. Benguet State University, La Trinidad,
Benguet.
Adviser: Evangeline B. Cungihan, MSc.
ABSTRACT
This study was conducted to document the organization and operation of Lusod
Agrarian Reform Community Multi-Purpose Cooperative (LARCMPC) particularly its
growth in terms of membership, total share capital, total liabilities, total reserves, total net
surplus and total asset; changes in the policies and practice and the problems
encountered.
This study was conducted at LARCMPC in Lusod, Kabayan, Benguet with the
manager and some member of the BOD served as the respondents. Secondary data was
taken from the office of the cooperative.
The number of members had been increasing although at varying rates, the
increase was due to the continuous information campaign done by the officers. There was
only a decrease in 1999 and 2002 due to withdrawals of some members because of
transfer of residence. The highest growth in paid-up share capital was in 2000 which is
50.96%, this is because of the change in their policy where the minimum share capital
was increased. The total liability increased when they availed of loan from DTI but
decreased yearly when the cooperative had been paying it. Total reserves had been
increasing also and decreased only in 2005 when they used it for expansion in their
building. The level of net surplus had been fluctuating every year with the highest
increment in net surplus obtained in 1996. Total asset had been continuously increasing
from 1994 to 2005.
There was not much changes an improvement in their policies and practices. The
problems met by the cooperative were; lack of education of members about cooperative,
loan delinquency, and fast turnover of saleslady due to low salary.
ii
TABLE OF CONTENTS
Page
Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Background of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Scope and Limitation of the Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Importance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Locale and Time of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Respondents of the Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Data Collection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Data Gathered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
RESULTS AND DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Organizational Structure of LARCMPC . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Financial Growth of the Cooperative. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Changes in the Policies and Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
Problems of the Cooperative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS . . . . . . . . . . . . . .
22
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
LITERATURE CITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
EXHIBIT: Organizational Structure of the
Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
1
INTRODUCTION
Background of the Study
Barangay Lusod is located on the North Eastern part of Poblacion Kabayan and
lies along the boundary of Benguet and Ifugao provinces. Lusod is the farthest barangay
of the municipality of Kabayan and it is the largest barangay in terms of land area which
is 3,026 hectares. It has an altitude of 700 to 1000 meters above sea level and is it about
45 kilometers away from the City of Baguio. The terrain is mountainous, sloping and flat
along the river banks. The place is not at this time accessible to vehicle transportation ,
though there is now a road which was just constructed in 2006. It has a temperate climate.
The barangay is composed of 214 households and most of them are Kalanguya by
ethnicity. The Ibaloi and Kankanaey were migrants from other places. Most of the people
derive their income from farming which is very limited. Most of them went to other
places to work as laborers of other farmers just to earn for living (Catao, 2005).
In 1992, the Department of Agrarian Reform (DAR) headed by Felix Lachica,
Provinbcial Agrarian Reform Officer II together with the Municipal Agrarian Reform
Officer, Mr. Peter Bantasan and other DAR personnel launched barangay Lusod as an
Agrarian Reform area. They conducted a survey and documentation of the land of the
Indigenous People and farmer beneficiaries. Barangay Lusod was the first Agrarian
Reform Community in Benguet under the Department of Environment and Natural
Resources (DENR) by virtue of Department Order no. 2, Section 31 and 32 Series 1990.
It was found out that Lusod is a potential agricultural area having vast land suitable for
agriculture and livestock raising in addition to great reserves of human and natural
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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resources. With this natural endowment the organizers saw the potential of putting up a
cooperative that would boost up community development. After a month of their visit,
the DAR personnel came back to Lusod and conducted trainings and seminars for the
organization of a cooperative. The people became interested after the seminar so they
organized the cooperative with an initial members of 49 and a starting capital of twenty
thousand pesos (P20,000). It was registered with the Cooperative Development Authority
(CDA) on May 6, 1994 under CEO 322. The cooperative first opted to engage in selling
basic commodities to the members and non-members as well. Later, when its capital
increased it diversify it operation to include credit. Management of the cooperative was
first handled by the officers but bulk of the work was given to the Board of Directors.
They worked as volunteers. The first Board of Directors were Stephen Nayosan, as
chairman, Ambrocio Agcio, as vice chairman; with Miguel Bugtong, Mando Bugtong
and Lazo Libag as members. The chairman of the board was the manager at the same
time. It was agreed that the BOD would not receive any honorarium for the first year of
operation.
With the continuous cooperative training being given by DAR and other
government agencies like CDA, DA, DTI and TESDA together with the dedication of the
officers and members to work, the management of the cooperative was successful.
Through the cooperative, the members were trained to employ new agricultural methods
and techniques to improve their crops and livestock and maximize production. The
farmers were taught to tap and utilize properly their resources and were encouraged to
intensify farm production that could foster economic growth within the barangay and in
adjoining communities.
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In 2002, the cooperative embarked on a special project which was the Gipah Food and
Beverages Processing Center that mainly process the gipah leaves into tea. The manager
of this project was Mrs. Elisa Sagayo, marketing officer was Mrs. Gina Basilio and the
quality controller was Mr. Christopher Carpio, the Senior Program Technologist of DAR.
Currently, the LARCMPC holds the distinction of being the only cooperative in the
region that embarks on this kind of project.
The cooperative was organized with the following objectives to fulfill:
1. to develop an appropriate system of land tenure, land development, land
consolidation or land management in areas covered by the Agrarian Reform
Program,
2. to encourage thrift and savings among the members,
3. to create funds inorder to grant loans for productive and providential purposes to
its members,
4. to provide goods and services and other requirements of the members,
5. to promote the cooperative as a way of life for improving the social and economic
well-being of members,
6. to do any related activity for the members self-government, improve social and/
or economic well-being, and
7. to work with the cooperative movement, non-government and government
organizations/entities in the promotion and development of cooperatives and
carrying out government policies.
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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Objectives of the Study
This study was conducted to document the story of Lusod Agrarian Reform
Community Multipurpose Cooperative. Specifically, this study aimed to:
1. Assess the growth of the cooperative in terms of membership, paid-up share
capital, total asset, total liabilities, and total reserves;
2. Find out any changes and improvement in their policies and practices; and
3. Identify problems of the cooperative and come up with solutions or
recommendations for the improvement of LARC MPC.
Scope and Limitation of the Study
The study focused on the business operation of the cooperative, the policies and
practices, and its financial performance. The data gathered covered the twelve years of
operation from 1994 to 2006.
Importance of the Study
The study would provide relevant information on the status of LARC MPC to the
members. It would allow them to have an overview on their cooperative that would
motivate them to support the cooperative. Furthermore, identified problems would be
addressed so that they would not hamper the operation of the cooperative.
In addition, the research would serve as a reference material to other students,
especially to the BS Agribusiness Cooperative Management students who would be
conducting related studies in the future.
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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METHODOLOGY
Locale and Time of the Study
The study was conducted at Lusod, Kabayan, Benguet where the main office of
the cooperative is located. Figure 1 presents the map of Kabayan showing the location of
the cooperative studied. This was conducted from December 2006 to January 2007.
Respondents of the Study
The respondents of the study was the manager of the LARC MPC and some
members of the Board of Directors
Data Collection
The needed data was gathered through a personal interview. Secondary data was
collected from the annual financial reports of the cooperative, from the by-laws, other
reports submitted by the officers and committee members of the cooperative, and minutes
of meetings of the Board of Directors.
Data Gathered
The data gathered were the number of members, paid-up share capital, total asset,
total liabilities, total net surplus and total reserves, changes in their policies and practices,
an problems of the cooperative.
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Data Analysis
The data to be collected was tabulated and analyzed with the use of trend analysis.
LARCMPC
Figure 1. Map of Kabayan showing the location of the cooperative studied
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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RESULTS AND DISCUSSION
Organizational Structure of LARCMPC
The organizational structure of the cooperative is composed of the general
assembly, the board of directors plus the secretary and the treasurer, the committees and
the management staff. The organizational chart of the cooperative is shown in Exhibit 1.
The general assembly. The general assembly consist of the regular members of
the cooperative. Membership of LARCMPC was opened to the residents of barangay
Lusod, it composed of farmers, women and youth. The regular members were those who
underwent the Pre-membership Education Seminar, paid the membership fee of P50.00
and the minimum share capital of five hundred pesos (P500.00). The duties and
responsibilities of the members are presented in Appendix 1.
Table 1 shows the growth in membership from the time it was registered to the
Cooperative Development Authority (CDA) in 1994 up to 2006. The number of members
had been increasing annually, although at varying rates of increase. It was only in 1999
and 2002 that a decrease was experienced. This was due to withdrawals of some
members. These members withdrew because they transferred to another residence which
was far from the cooperative. Some of them transferred to other places to look for work.
One big factor that accounted for the increase in membership was the information
campaign done by the officers of the benefits and advantages that could be received by
members. The trend in the growth rate for the first three years had been increasing.
However, for the ensuing years the growth rate had been declining, except between 1999
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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and 2000 and between 2002 to 2003. The number of members between 2005 to 2006 did
not have any change.
Table 1. Growth in membership from 1994 to 2006
YEAR
NUMBER OF MEMBERS RATE OF GROWTH (%)
1994
49
1995
57
16.33
1996
72
26.32
1997
81
12.50
1998
88
8.64
1999
85
3.41
2000
89
4.71
2001
91
2.25
2002
90
1.10
2003
103
14.44
2004
109
5.83
2005
112
2.75
2006
112
0
The board of directors. The board of directors of LARCMPC consisted of five (5)
members, the members of the board of directors. The chairman and vice-chairman were
appointed by the members not voted upon. Most of the members of the cooperative were
members of the Jehovah’s Witness so they do not want to vote. The board of directors
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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hold a monthly regular meeting apart form the special meeting that are called by the
chairman when necessary. The duties and responsibilities of the board is presented in
Appendix 2.
They also have a secretary of the board and a treasurer. These two were not
members of the board but were appointed by the board to perform a specific function as
presented in Appendix 3.
The committees. There are four standing committees of the cooperative: the Audit
and Inventory Committee, the Credit Committee, the Election Committee, and the
Education and Training Committee. These different committees assist the Board of
Directors in the planning and implementation of the development programs of the
cooperative. Each committee is composed of three (3) members. Like the BOD, the
chairman and the vice-chairman were appointed by the members. Each committee had its
own schedule of regular meeting. The duties and responsibilities of each committee are
shown in Appendix 2.
The management staff. The management staff of the cooperative composed of six
(6) employees headed by the General Manager, Mrs. Julia Tanawe. The other employees
included the accountant/bookkeeper, the secretary, the treasurer, and the sales personnel.
They were expected to maintain an efficient service with the cooperative. The duties and
responsibilities of each staff are presented in Appendix 4.
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Financial Growth of the Cooperative
This presents the growth in paid-up share capital, total assets, total liabilities, total
reserves, and changes in the net surplus from the start of its operation up to 2005. Figures
for 2006 were not included because the financial statements are still under audit.
Annual growth in paid-up share capital. The growth in paid-up share is presented
in Table 2 and Figure 2. There was a continuous increase in the total amount of paid-up
share capital over the years. The rate of growth had been increasing from 1994 to 1998
then in 1999 it declined. A great increase of about 51% was experienced in 2000 then
another big increase was experienced in 2003, about 47%. The lowest increment was
experienced in 2002 with only 1.4%.
Table 2. Annual growth in paid-up share capital
YEAR
TOTAL PAID-UP SHARE
RATE O
F GROWTH
CAPITAL (in pesos)
( % )
1994
33,000.00
1995
36,050.00
9.24
1996
42,626.00
18.24
1997
50,503.00
18.48
1998
63,453.00
25.64
1999
67,403.00
6.23
2000
101,749.46
50.96
2001
104,998.46
3.19
2002
106,467.64
1.40
2003
156,639.65
47.12
2005
201,226.00
19.10
2004
168,960.65
7.87
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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250.00
sos)
and pe 200.00
us
ho
150.00
t
a
l
(
i
n t
a
pi
r
e
C 100.00
up Sha 50.00
a
i
d-
T
o
t
a
l
P
0.00
Figure 1. Graph of the annual paid-up share capital
1992
1994
1996
1998
2000
2002
2004
2006
Year
Figure 2. Graph of the annual total paid-up share capital
Annual changes in total liabilities. Total liabilities consisted of savings deposits of
members and external borrowings of the cooperative. Table 3 and Figure 3 presents that
total liabilities of the cooperative for the years 1995 and 1996 was only P10,000 for each
year. However, in 1997 total liabilities increased to P100,704 or about 907%. This was
due to the unallocated net surplus broken down as follows: dividends payable of P60,937,
patronage refund payable of P26,115.77, and due to Apex organization of P3,652.18. The
P10,000 liabilities for the past two years was salaries payable. In 1998 and 1999, a major
component of total liabilities was the undistributed net surplus. In 2000, all the old
payables were paid but a loan of P100,000 was obtained from DTI. The new payables
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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were P4,000 accounts payable and due to Apex organization of P5,817.42. From 2001 to
2003 total liabilities had been declining because those were the years that the cooperative
had been paying the loan from DTI. Total liabilities again increased by about 233% in
2005 but these are mainly undistributed income. Savings deposit was very minimal with
only P2,838.72. There were no accounts payable and loans payable at the end of 2005.
Table 3. Total liabilities from 1995 to 2005
YEAR
TOTAL LIABILITIES
RATE OF CHANGE
(in pesos)
( % )
1994
-
1995
10,000.00
1996
10,000.00
0
1997
100,704.00
907.05
1998
115,993.68
15.18
1999
105,748.68
- 8.83
2000
109,817.42
3.85
2001
79,974.62
- 27.17
2002
45,836.29
- 42.69
2003
15,966.68
- 65.17
2004
16,423.60
2.86
2005
54,735.66
233.27
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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140
) 120
e
s
os
d
p 100
s
an
80
t
h
ou
ie
s
(
in
60
ilit
liab 40
al
T
ot 20
0
1994
1996
1998
2000
2002
2004
2006
Year
Figure 3. Graph of the total liabilities
Annual growth in total reserves. Every cooperative is mandated by law, the
Cooperative Code of the Philippines (R.A. 6939), to allocate a percentage of their net
surplus as reserve fund. The annual total reserve fund of the cooperative is presented in
Table 4 and Figure 3. The total reserve fund for the first three years were not available
due to incomplete records of the cooperative. The total reserve fund of the cooperative at
the end of 1997 was P52,678.65. This comprised of the general reserve fund, educational
fund, and optional fund. It increased in 1998 by 30.22% due to the increase in all the
three components but in 1999 there was no change in total reserves because the net
surplus was very small. In 2000 the amount of reserves doubled due to the high net
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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14
surplus during the year. Again in 2001 there was a big increase (41%) due to a high net
surplus but from 2002 to 2004 the increment had been very minimal because of low net
surplus. In 2005 the total reserve fund declined by about 6% because the optional fund
was used to finish the extension of their building.
Table 4. Total reserves fund from 1997 to 2005
1994
TOTAL RESERVES
RATE OF CHANGE
(in pesos)
( % )
1997
52,678.65
1998
68,596.30
30.22
1999
68,596.30
0
2000
103,002.95
50.16
2001
145,123.39
40.89
2002
166,963.49
15.05
2003
174,913.54
4.76
2004
183,011.97
4.63
2005
172,362.53
-5.82
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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200
180
)
e
s
os 160
d
p 140
s
an 120
100
s
(
i
n
t
h
ou
80
e
s
e
r
ve
60
R
al 40
ot
T 20
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
Figure 4. Graph of the annual total reserves
Net surplus. At the initial year of operation, the net surplus was P30,861.79. This
amount increased by 37.14% the following year. At the end of the third year, the amount
of net surplus more than doubled as of the prior year (57.74%) but in 1997, the fourth
year of operation, net surplus declined by 32% as of the previous year. Net surplus
became bigger in 1998 but on the following year it declined so much to only P13,370.20
or a 76% decrease as of the previous year. There was a large increase in 2001 but
declined in the next three years. It only increased in 2005 with a total net surplus of
P58,941.63 (Table 5).
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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Table 5. Annual net surplus from 1994 to 2005
YEAR
NET SURPLUS
RATE OF CHANGE
(in pesos)
( % )
1994
30,861.79
1995
42,323.08
37.14
1996
66,759.02
57.74
1997
45,479.04
-31.88
1998
55,456.70
21.94
1999
13,370.20
-75.89
2000
17,686.52
32.28
2001
41,886.45
136.80
2002
37,440.17
-10.62
2003
24,714.47
-33.99
2004
23,138.34
-6.38
2005
58,941.63
154.70
Total asset. Total asset of the cooperative in 1994 was only P75, 367.54. This
became P566, 963.66 at the end of 2005. Table 6 and Figure 4 shows the amount of total
asset and the annual growth rate from 1994 to 2005. There was a continuous increase in
total asset from 1994 to 2006. In some years the growth was very fast but in some years
the growth was slow. The highest rate of growth was experienced in 1999 with about
92%. This was followed 1995 with 73% rate of increase then 1996 with 59%. On the
other hand, the lowest growth was experienced in 2005 with only 4% increase. The
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increment in total asset was depended on the increment in the paid-up share capital, the
liabilities, and reserves. It was noted earlier that there was an increase in paid-up share
capital, and total liabilities but there was a decline in the total reserves so this explains the
slow increment in total asset.
Table 6. Total asset from 1994 to 2005
YEAR
TOTAL ASSET
RATE OF CHANGE
(in pesos)
( % )
1994
75,367.54
1995
130,564.87
73.24
1996
208,899.89
59.10
1997
265,694.93
27.19
1998
319,829.68
20.37
1999
326,904.88
92.21
2000
375,821.57
14.97
2001
399,197.96
6.22
2002
450,379.91
12.82
2003
508,348.69
12.87
2004
543,108.03
6.84
2005
566,963.66
4.39
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600.00
500.00
s
o
s
)
400.00
a
nd pe
us
ho 300.00
s
s
e
t
(
i
n t
200.00
o
t
a
l
A
T
100.00
0.00
1992
1994
1996
1998
2000
2002
2004
2006
Year
Figure 5. Graph of the annual total asset
Changes in the Policies and Practices
Table 7 presents the changes in the policies and practices of the cooperative. It
can be noted from the table that there were changes and improvements in their policies.
The had increased the membership fee from P50.00 to P100.00 and the minimum share
capital from P500.00 to P1,000.00. It was found earlier that the number of members had
been increasing. This implies that even though the membership fee and the minimum
share capital increased, new members were willing to pay the higher amount inorder to
Lusod Agrarian Reform Community Multi-purpose Cooperative:
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19
become members of the cooperative. Another change in their policy was the imposition
of fines to members who do not attend the general assembly meeting and the fines of the
officers for not attending meetings was also increased from P50 to P100 per absence
during a meeting. The cooperative imposed this penalty to discipline the members and
officers. They can only be informed about the policies of the cooperative when they
attend general assembly meetings. As a result of these new policies and practices
majority of the members and the officers are aware of the policies of the cooperative.
Another improvement in their practice was the giving of honorarium to volunteer
workers.
Table 7. Old and new policies and practices of the cooperative
OLD POLICY/PRACTICE
NEW POLICY/PRACTICE
Membership
- Fifty pesos (P50.00) membership fee - One hundred pesos (P100.00)
Minimum Share Capital
- Five hundred pesos (P500.00)
- One thousand pesos (P1,000.00)
Loan
- Loan ceiling was 80% of share capital
- 2 to 3 times the share capital
- Interest on regular loan was 1.5%/ mo.
- 2% per month
Attendance to General Assembly Meeting
- no fines to members who do not attend
- P50 fine
- P50 fines for officers who do not attend - P100 fines for officers who do not
attend
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Table 7. continued …
Giving of Honorarium
- No honorarium for volunteer workers
-volunteer workers are given minimal
honorarium
Problems of the Cooperative
The vice chairman of the board identified the following problems met by the
cooperative: lack of training and education of members regarding the operation of the
cooperative, delinquency of members in paying their loans and accounts in the
cooperative, inadequate knowledge and skills of officers regarding the operation and
control of the cooperative, lack of motivation of some staff in doing their job, and fast
turnover of sales lady.
On the lack of training and education of members, some members were not able
to attend trainings and seminars because they were busy in their work and in their
families. Because of economic reason, some prefer to work for a pay than to go and
attend seminars. In most cases, only the officers are attending seminars and trainings.
Since majority of the members were farmers, their source of paying their loans and
accounts in the cooperative is from their farm production. When they could not sell their
product then they could not pay their loan. Some of the officers have low educational
attainment thus they have difficulty in acquiring and skills necessary in their respective
functions. On the lack of motivation of some staff and fast turnover of the sales clerk was
due to the lack of monetary incentives. The officers were not given an honorarium or per
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diem when they attend meetings and the salary of the staff is very low that they even
prefer to work as a laborer in the farm because the wage rate is more.
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SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
The Lusod Agrarian Reform Community Multipurpose Cooperative was
organized by the 49 agrarian reform beneficiaries as a window for technical and financial
assistances. One objective of the cooperative was to develop an appropriate system of
land tenure, land development, and land consolidation or land management in the areas
covered by agrarian reform. The study was conducted primarily to assess the growth of
the cooperative in terms of its membership, paid-up share capital, total liabilities, total
reserves, and total assets; to find out any changes and improvement in their policies and
practices; and to identify problems of the cooperative and come up with solutions or
recommendations for the improvement of LARCMPC.
The manager and some members of the Board of Directors served as the sources
of primary information while secondary information was taken from the records and
reports filed at the cooperative office. This study was conducted from December 2006 to
January 2007 at the cooperative office in Lusod, Kabayan, Benguet.
The result of the study showed that there was growth in membership, paid-up
share capital, total reserves, total asset and even in the total liabilities. The amount of net
surplus per year had been fluctuating . There were some years that it increased and there
were also years that it decreased. There had been increment in membership every year
except for 2006 that it remained. The paid-up share capital and the total asset had been
continuously also. There were some years that the increments were high and there were
some years that increments were low in both the share capital and the total asset. The
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growth in total reserves had a different behavior. There was no growth in 1999 then there
was high growth for the next two years then slowly increased for the next years but in
2005 there was a slight decline in the total amount of reserves. The total liabilities
increased from P10,000 in 1995 and 1996 to P100,704 in 1997. The total liabilities had
been continuously decreasing from 1998 to 2004 as the cooperative had been paying its
liabilities but in 2005 it increased again due to the increase in savings deposit, and
undistributed net surplus.
As to the policies and practices of the cooperative there was not much changes
and improvements except for some adjustments in the credit policies. The problems of
the cooperative were the lack of education of members, poor knowledge and skills on
cooperative management by the officers, loan delinquency and the fast turnover of sales
lady due to low salary.
Conclusions
1. The membership was limited only to the residents of barangay Lusod so this also
limits the growth in membership of the cooperative.
2. There was growth in paid-up share capital but it was also limited due to the
limited sources of income of the members and the limited number of members.
3. The total reserve fund had been increasing every year because of the
accumulation of the general reserve fund, optional fund and the cooperative
education fund-local.
4. There was not much change in the policies and practices of the cooperative.
5. There was fast turnover of sales lady in the consumer store due to low salary.
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Recommendations
1. The Board of Directors should amend the by-laws of the cooperative to open
it membership to other people residing in nearby barangays and then intensify
the education and campaign for membership so that the number of members
will expand.
2. The Board of Directors should come up with a capital build-up program so
that members will add to their paid-up share capital.
3. The cooperative should use its CETF to educate its members by sending them
to seminars/trainings or by conducting the training themselves. In this way the
members would have a better understanding about cooperative. They should
target educating the members first and not concentrate on the officers only.
4. The salary of the sales lady should be increased so that she will stay long in
the cooperative. Besides, incentives of other management staff should be
increased also so that they will be encouraged to give their best service in the
cooperative.
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LITERATURE CITED
CATAO, MARFELYN. 2005. Gipah food and beverage processing center: A case study
on the special project of Lusod Agrarian Reform Community Multi purpose
Cooperative. BS Thesis.Benguet State University, La Trinidad, Benguet. P 1
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EXHIBIT 1
ORGANIZATIONAL STRUCTURE OF LARCMPC
GENERAL ASS
EMBLY
Audit & Inventory
Board of
Credit
Election
Committee
Directors
Committee
Committee
Treasurer
Education
Committee
Secretary
Manager
Accountant/
Gipah Food and
Cashier/Collector/
Bookkeeper
Beverages Processing
Storekeeper
Center Staff
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APPENDIX A
DUTIES AND RESPONSIBILITIES OF MEMBERS
1. Contribute to the capital of the cooperative through share capital contributions,
payment of membership fee, savings deposit and other means as provided in the
by-laws and as per policy formulated by the general assembly and the board of
directors;
2. Patronize the services and business of the cooperative;
3. Actively participate in general assemblies and other activities of the cooperative;
4. Pay/his/her accounts and obligations as they become due and payable;
5. Vote/appoint for qualified, competent, honest, respectable and dedicated members
of the cooperative as per by-laws;
6. Attend trainings, seminars, workshops, and others as directed/requested by the
Board of Directors or Management; and
7. Promote and advertise the cooperative and its business and services.
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APPENDIX B
POWERS, DUTIES AND RESPONSIBILITIES OF THE BOARD
1. Act on membership application;
2. Terminate membership;
3. Elect and /or appoint officers;
4. Appoint committees, delegate powers thereto and fill vacancies therein;
5. Determine the compensation of certain officers and employees;
6. Determine the adequacy of bonds of accountable officers;
7. Fix the date of regular, and call special meetings of the general assembly;
8. Hold regular and special meetings to act on the business affairs of the
cooperative;
9. Admit as directors or committee members appointees from credit or financial___;
10. Fill up vacancies in the board;
11. Raise revolving capital as authorized by the general assembly; and
12. Present complete audit reports to the general assembly.
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APPENDIX C
OFFICERS AND THEIR DUTIES AND RESPONSIBILITIES
Chairman of the Board
1. Sign all contracts and agreements, which the cooperative may enter into.
2. Sign pertinent transactions involving the manager.
3. Approve/disapprove the loan of the manager.
4. Perform all acts and duties actually performed by the Presiding Officer.
5. Perform such other duties as the board may prescribe.
6. Assists the manager in all business transactions.
7. Prepare agenda of the meeting with the manager.
8. Preside overall meetings of the cooperative and the Board of Directors.
Vice Chairman
If the Chairman is absent in the case of disability or incapacity of the Chairman,
the Vice Chairman shall perform the duties and responsibilities of the Chairman.
Treasurer
1. Take the custody of all money, securities and prepares list of acquired properties
by the cooperative and maintain complete records of all its transactions.
2. Pay all financial obligations incurred by the cooperative approved by the
manager/or board of directors.
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3. Turn over all money, securities, papers books and other properties belonging to
the cooperative in his possession to his/her successors upon the
expiration/termination of his/her term of office.
4. Post an adequate bond to assure the faithful performance of his/her duties.
5. Sign and process pertinent documents upon authorization of the board of
directors.
6. Keep a complete record of cash transactions for a proof of cash position at any
given time and date.
7. Render reports and certify the correctness of cash position of the cooperative in
all financial statements and other records submitted to the board of directors, the
general assembly in the cooperative the CDA.
8. Perform duties of the secretary in the absence or inability to his/her duties as may
be prescribed by the board of directors.
Secretary
1. Keep and maintain a complete registry of all members and record of all minutes
of meetings of the board of directors and the general assembly.
2. Keep and maintain the share and transfer book, serve as custodian of the corporate
seal of the cooperative.
3. Give notice of all meetings called.
4. Turn over all books and records and other properties belonging to the cooperative
in his possession to his/her successor upon the expiration/termination of his/her
term of office.
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5. Perform the duties of the treasurer in the case of his/her absence to perform
his/her duties.
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APPENDIX D
DUTIES AND RESPONSIBIULITIES OF THE MANAGEMENT STAFF
General Manager
1. Shall undergo policies set by the general assembly and the Board of Directors and
has general charge of all the phases of the business operation of the cooperative.
2. Render reports monthly, annually or as may be required by the Board of Directors
or the general assembly, and preserve the books, documents, correspondence and
records of whatever nature concerning the operations of the cooperative which
may come into his possession.
3. He may employ, supervise and/ or dismiss any agent or employee in the
management force.
4. Shall maintain records and accounts of the cooperative in such manner that the
true condition of its business may be ascertained at any timer.
5. Recommend policy to the Board of Directors based on the operations of the
cooperative.
6. Post an adequate bond to assure the faithful performance of his duties.
7. Source out funds in cash or in kind (with the confirmation or approval of the
Board of Directors).
8. Perform other duties as the Board of Directors may prescribe and turn over to his
successor all properties belonging to the cooperative in his possession or over
which he has control upon the expiration/termination of his services.
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Accountant
1. Shall install an adequate and effective accounting system in the cooperative.
2. Render monthly reports to the general manager and board on the financial
condition and operations of the cooperative and annual reports to the general
assembly as required.
3. Contract and record whatever kinds pertaining to the business of the cooperative
that may come to his possession.
4. Coordinate with the manager and the audit and inventory committee in assisting
the board in the preparation of the annual budget.
5. assist the Chairman of the Inventory Committee in the preservation of the books
of accounts, documents and vouchers.
Bookkeeper
1. Shall see to it that cash received by the treasurer, cashier, or collectors are
properly receipted and duly accounted for.
2. Shall record in the books of accounts all transactions of the cooperative and see to
it that they are properly supported by the prescribed accounting forms and
supporting papers.
3. prepare monthly bank reconciliation of all cash in bank accounts.
4. Prepare the trial balance and financial statement monthly or quarterly as required
and make available to the general manager and board of directors.
5. Check the daily summary reports required of these are submitted with the attached
supporting papers.
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6. Reconcile his/her records with the treasurer’s or cashier’s records on the cash
position at least on a weekly basis.
7. Compute interest on savings accounts on a quarterly basis.
Storekeeper
1. Responsible for the proper display of goods and other commodities in the
cooperative store.
2. Responsible for the sale of goods and other commodities in the consumer’s store.
3. Sell goods over the counter for cash or on account depending on the policies
formulated by the Board of Directors.
4. Record the purchases of the members indicating the member’s name, goods
purchased, amount of purchase and the date purchase.
5. See to it that the store is secured before leaving hid/her workplace.
6. Prepare daily sales summary reports at the end of each day and submit to the
treasurer/cashier together with the cash collectors.
7. Assist in the collection of store accounts if credit sales are allowed as per policy.
8. Make a periodic reports to the general manager regarding store operations.
9. Make a listing of goods and other items to be purchased.
10. Keep the store and premises clean and orderly at all times.
Cashier
1. Receive cash from all sources as determined by the Board as an accountable
officer.
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2. Assist the treasurer in the payments of obligations by issuing checks based on the
approved vouchers and signed b y the authorized signatories.
3. Ensure safety of all documents under his/her custody.
4. prepare daily summary report indicating the amount of cash received, the sources
and the inclusive receipts issued, deposits and disbursements made during the day
including the payees, voucher numbers and check numbers.
5. perform such other functions as may be assigned by the general manager or
treasurer.
Collector
1. Responsible for the collection of payments of loans and other accounts and
obligations payable to the cooperative.
2. Submit daily cash payment collections to the cashier or treasurer.
3. Make periodic reports to the Loans Officer and/or General Manager on the status
of accounts.
4. Distribute collection letters, demand letters, statements of accounts and other
notes.
5. periodic summary of collections indicating the payees name, amount paid, date of
payment of an account classifications.
6. Perform such other functions as assigned by the Loans Officer or General
Manger.
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APPENDIX E
INTERVIEW GUIDE
1. Who initiated the organization of this cooperative?
2. What government agency and non-government organizations were involved in the
organization?
3. What was the purpose of the cooperative?
4. Who were the first leaders of the cooperative?
5. Who were the first members of the Board of Directors and officers of the
cooperative? Incorporators or cooperators?
6. How much was the initial capital? Initial members?
7. How was the operation started?
8. Did all the members attend the pre-membership education seminar?
9. Who conducts the PMES? How regular is the conduct of PMES?
10. Were there cases of withdrawal of members? What were the causes of
withdrawal? How many members withdraw every year?
11. What factors affect the increase/decrease in your total asset?
12. Did you amend your by-laws? How many times?
13. Were there changes in your policies and practices? What old policies and
practices were changed and what are the new ones?
14. Do you stick to your policies in your operation or were there cases that you
disregard your policies to suit the situation?
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Lusod Agrarian Reform Community Multi-purpose Cooperative:
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BAGUISTA, TERMA D. APRIL 2007. Lusod Agrarian Reform Community
Multi-purpose Cooperative: A Documentation. Benguet State University, La Trinidad,
Benguet.
Adviser: Evangeline B. Cungihan, MSc.
ABSTRACT
This study was conducted to document the organization and operation of Lusod
Agrarian Reform Community Multi-Purpose Cooperative (LARCMPC) particularly its
growth in terms of membership, total share capital, total liabilities, total reserves, total net
surplus and total asset; changes in the policies and practice and the problems
encountered.
This study was conducted at LARCMPC in Lusod, Kabayan, Benguet with the
manager and some member of the BOD served as the respondents. Secondary data was
taken from the office of the cooperative.
The number of members had been increasing although at varying rates, the
increase was due to the continuous information campaign done by the officers. There was
only a decrease in 1999 and 2002 due to withdrawals of some members because of
transfer of residence. The highest growth in paid-up share capital was in 2000 which is
50.96%, this is because of the change in their policy where the minimum share capital
was increased. The total liability increased when they availed of loan from DTI but
decreased yearly when the cooperative had been paying it. Total reserves had been
increasing also and decreased only in 2005 when they used it for expansion in their
building. The level of net surplus had been fluctuating every year with the highest
increment in net surplus obtained in 1996. Total asset had been continuously increasing
from 1994 to 2005.
There was not much changes an improvement in their policies and practices. The
problems met by the cooperative were; lack of education of members about cooperative,
loan delinquency, and fast turnover of saleslady due to low salary.
ii
TABLE OF CONTENTS
Page
Bibliography. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Abstract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
i
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iii
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Background of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Objectives of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Scope and Limitation of the Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Importance of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Locale and Time of the Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Respondents of the Study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Data Collection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Data Gathered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Data Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
RESULTS AND DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Organizational Structure of LARCMPC . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Financial Growth of the Cooperative. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
Changes in the Policies and Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18
Problems of the Cooperative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS . . . . . . . . . . . . . .
22
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
LITERATURE CITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
EXHIBIT: Organizational Structure of the
Cooperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
1
INTRODUCTION
Background of the Study
Barangay Lusod is located on the North Eastern part of Poblacion Kabayan and
lies along the boundary of Benguet and Ifugao provinces. Lusod is the farthest barangay
of the municipality of Kabayan and it is the largest barangay in terms of land area which
is 3,026 hectares. It has an altitude of 700 to 1000 meters above sea level and is it about
45 kilometers away from the City of Baguio. The terrain is mountainous, sloping and flat
along the river banks. The place is not at this time accessible to vehicle transportation ,
though there is now a road which was just constructed in 2006. It has a temperate climate.
The barangay is composed of 214 households and most of them are Kalanguya by
ethnicity. The Ibaloi and Kankanaey were migrants from other places. Most of the people
derive their income from farming which is very limited. Most of them went to other
places to work as laborers of other farmers just to earn for living (Catao, 2005).
In 1992, the Department of Agrarian Reform (DAR) headed by Felix Lachica,
Provinbcial Agrarian Reform Officer II together with the Municipal Agrarian Reform
Officer, Mr. Peter Bantasan and other DAR personnel launched barangay Lusod as an
Agrarian Reform area. They conducted a survey and documentation of the land of the
Indigenous People and farmer beneficiaries. Barangay Lusod was the first Agrarian
Reform Community in Benguet under the Department of Environment and Natural
Resources (DENR) by virtue of Department Order no. 2, Section 31 and 32 Series 1990.
It was found out that Lusod is a potential agricultural area having vast land suitable for
agriculture and livestock raising in addition to great reserves of human and natural
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resources. With this natural endowment the organizers saw the potential of putting up a
cooperative that would boost up community development. After a month of their visit,
the DAR personnel came back to Lusod and conducted trainings and seminars for the
organization of a cooperative. The people became interested after the seminar so they
organized the cooperative with an initial members of 49 and a starting capital of twenty
thousand pesos (P20,000). It was registered with the Cooperative Development Authority
(CDA) on May 6, 1994 under CEO 322. The cooperative first opted to engage in selling
basic commodities to the members and non-members as well. Later, when its capital
increased it diversify it operation to include credit. Management of the cooperative was
first handled by the officers but bulk of the work was given to the Board of Directors.
They worked as volunteers. The first Board of Directors were Stephen Nayosan, as
chairman, Ambrocio Agcio, as vice chairman; with Miguel Bugtong, Mando Bugtong
and Lazo Libag as members. The chairman of the board was the manager at the same
time. It was agreed that the BOD would not receive any honorarium for the first year of
operation.
With the continuous cooperative training being given by DAR and other
government agencies like CDA, DA, DTI and TESDA together with the dedication of the
officers and members to work, the management of the cooperative was successful.
Through the cooperative, the members were trained to employ new agricultural methods
and techniques to improve their crops and livestock and maximize production. The
farmers were taught to tap and utilize properly their resources and were encouraged to
intensify farm production that could foster economic growth within the barangay and in
adjoining communities.
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In 2002, the cooperative embarked on a special project which was the Gipah Food and
Beverages Processing Center that mainly process the gipah leaves into tea. The manager
of this project was Mrs. Elisa Sagayo, marketing officer was Mrs. Gina Basilio and the
quality controller was Mr. Christopher Carpio, the Senior Program Technologist of DAR.
Currently, the LARCMPC holds the distinction of being the only cooperative in the
region that embarks on this kind of project.
The cooperative was organized with the following objectives to fulfill:
1. to develop an appropriate system of land tenure, land development, land
consolidation or land management in areas covered by the Agrarian Reform
Program,
2. to encourage thrift and savings among the members,
3. to create funds inorder to grant loans for productive and providential purposes to
its members,
4. to provide goods and services and other requirements of the members,
5. to promote the cooperative as a way of life for improving the social and economic
well-being of members,
6. to do any related activity for the members self-government, improve social and/
or economic well-being, and
7. to work with the cooperative movement, non-government and government
organizations/entities in the promotion and development of cooperatives and
carrying out government policies.
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Objectives of the Study
This study was conducted to document the story of Lusod Agrarian Reform
Community Multipurpose Cooperative. Specifically, this study aimed to:
1. Assess the growth of the cooperative in terms of membership, paid-up share
capital, total asset, total liabilities, and total reserves;
2. Find out any changes and improvement in their policies and practices; and
3. Identify problems of the cooperative and come up with solutions or
recommendations for the improvement of LARC MPC.
Scope and Limitation of the Study
The study focused on the business operation of the cooperative, the policies and
practices, and its financial performance. The data gathered covered the twelve years of
operation from 1994 to 2006.
Importance of the Study
The study would provide relevant information on the status of LARC MPC to the
members. It would allow them to have an overview on their cooperative that would
motivate them to support the cooperative. Furthermore, identified problems would be
addressed so that they would not hamper the operation of the cooperative.
In addition, the research would serve as a reference material to other students,
especially to the BS Agribusiness Cooperative Management students who would be
conducting related studies in the future.
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METHODOLOGY
Locale and Time of the Study
The study was conducted at Lusod, Kabayan, Benguet where the main office of
the cooperative is located. Figure 1 presents the map of Kabayan showing the location of
the cooperative studied. This was conducted from December 2006 to January 2007.
Respondents of the Study
The respondents of the study was the manager of the LARC MPC and some
members of the Board of Directors
Data Collection
The needed data was gathered through a personal interview. Secondary data was
collected from the annual financial reports of the cooperative, from the by-laws, other
reports submitted by the officers and committee members of the cooperative, and minutes
of meetings of the Board of Directors.
Data Gathered
The data gathered were the number of members, paid-up share capital, total asset,
total liabilities, total net surplus and total reserves, changes in their policies and practices,
an problems of the cooperative.
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Data Analysis
The data to be collected was tabulated and analyzed with the use of trend analysis.
LARCMPC
Figure 1. Map of Kabayan showing the location of the cooperative studied
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RESULTS AND DISCUSSION
Organizational Structure of LARCMPC
The organizational structure of the cooperative is composed of the general
assembly, the board of directors plus the secretary and the treasurer, the committees and
the management staff. The organizational chart of the cooperative is shown in Exhibit 1.
The general assembly. The general assembly consist of the regular members of
the cooperative. Membership of LARCMPC was opened to the residents of barangay
Lusod, it composed of farmers, women and youth. The regular members were those who
underwent the Pre-membership Education Seminar, paid the membership fee of P50.00
and the minimum share capital of five hundred pesos (P500.00). The duties and
responsibilities of the members are presented in Appendix 1.
Table 1 shows the growth in membership from the time it was registered to the
Cooperative Development Authority (CDA) in 1994 up to 2006. The number of members
had been increasing annually, although at varying rates of increase. It was only in 1999
and 2002 that a decrease was experienced. This was due to withdrawals of some
members. These members withdrew because they transferred to another residence which
was far from the cooperative. Some of them transferred to other places to look for work.
One big factor that accounted for the increase in membership was the information
campaign done by the officers of the benefits and advantages that could be received by
members. The trend in the growth rate for the first three years had been increasing.
However, for the ensuing years the growth rate had been declining, except between 1999
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and 2000 and between 2002 to 2003. The number of members between 2005 to 2006 did
not have any change.
Table 1. Growth in membership from 1994 to 2006
YEAR
NUMBER OF MEMBERS RATE OF GROWTH (%)
1994
49
1995
57
16.33
1996
72
26.32
1997
81
12.50
1998
88
8.64
1999
85
3.41
2000
89
4.71
2001
91
2.25
2002
90
1.10
2003
103
14.44
2004
109
5.83
2005
112
2.75
2006
112
0
The board of directors. The board of directors of LARCMPC consisted of five (5)
members, the members of the board of directors. The chairman and vice-chairman were
appointed by the members not voted upon. Most of the members of the cooperative were
members of the Jehovah’s Witness so they do not want to vote. The board of directors
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hold a monthly regular meeting apart form the special meeting that are called by the
chairman when necessary. The duties and responsibilities of the board is presented in
Appendix 2.
They also have a secretary of the board and a treasurer. These two were not
members of the board but were appointed by the board to perform a specific function as
presented in Appendix 3.
The committees. There are four standing committees of the cooperative: the Audit
and Inventory Committee, the Credit Committee, the Election Committee, and the
Education and Training Committee. These different committees assist the Board of
Directors in the planning and implementation of the development programs of the
cooperative. Each committee is composed of three (3) members. Like the BOD, the
chairman and the vice-chairman were appointed by the members. Each committee had its
own schedule of regular meeting. The duties and responsibilities of each committee are
shown in Appendix 2.
The management staff. The management staff of the cooperative composed of six
(6) employees headed by the General Manager, Mrs. Julia Tanawe. The other employees
included the accountant/bookkeeper, the secretary, the treasurer, and the sales personnel.
They were expected to maintain an efficient service with the cooperative. The duties and
responsibilities of each staff are presented in Appendix 4.
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Financial Growth of the Cooperative
This presents the growth in paid-up share capital, total assets, total liabilities, total
reserves, and changes in the net surplus from the start of its operation up to 2005. Figures
for 2006 were not included because the financial statements are still under audit.
Annual growth in paid-up share capital. The growth in paid-up share is presented
in Table 2 and Figure 2. There was a continuous increase in the total amount of paid-up
share capital over the years. The rate of growth had been increasing from 1994 to 1998
then in 1999 it declined. A great increase of about 51% was experienced in 2000 then
another big increase was experienced in 2003, about 47%. The lowest increment was
experienced in 2002 with only 1.4%.
Table 2. Annual growth in paid-up share capital
YEAR
TOTAL PAID-UP SHARE
RATE O
F GROWTH
CAPITAL (in pesos)
( % )
1994
33,000.00
1995
36,050.00
9.24
1996
42,626.00
18.24
1997
50,503.00
18.48
1998
63,453.00
25.64
1999
67,403.00
6.23
2000
101,749.46
50.96
2001
104,998.46
3.19
2002
106,467.64
1.40
2003
156,639.65
47.12
2005
201,226.00
19.10
2004
168,960.65
7.87
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250.00
sos)
and pe 200.00
us
ho
150.00
t
a
l
(
i
n t
a
pi
r
e
C 100.00
up Sha 50.00
a
i
d-
T
o
t
a
l
P
0.00
Figure 1. Graph of the annual paid-up share capital
1992
1994
1996
1998
2000
2002
2004
2006
Year
Figure 2. Graph of the annual total paid-up share capital
Annual changes in total liabilities. Total liabilities consisted of savings deposits of
members and external borrowings of the cooperative. Table 3 and Figure 3 presents that
total liabilities of the cooperative for the years 1995 and 1996 was only P10,000 for each
year. However, in 1997 total liabilities increased to P100,704 or about 907%. This was
due to the unallocated net surplus broken down as follows: dividends payable of P60,937,
patronage refund payable of P26,115.77, and due to Apex organization of P3,652.18. The
P10,000 liabilities for the past two years was salaries payable. In 1998 and 1999, a major
component of total liabilities was the undistributed net surplus. In 2000, all the old
payables were paid but a loan of P100,000 was obtained from DTI. The new payables
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were P4,000 accounts payable and due to Apex organization of P5,817.42. From 2001 to
2003 total liabilities had been declining because those were the years that the cooperative
had been paying the loan from DTI. Total liabilities again increased by about 233% in
2005 but these are mainly undistributed income. Savings deposit was very minimal with
only P2,838.72. There were no accounts payable and loans payable at the end of 2005.
Table 3. Total liabilities from 1995 to 2005
YEAR
TOTAL LIABILITIES
RATE OF CHANGE
(in pesos)
( % )
1994
-
1995
10,000.00
1996
10,000.00
0
1997
100,704.00
907.05
1998
115,993.68
15.18
1999
105,748.68
- 8.83
2000
109,817.42
3.85
2001
79,974.62
- 27.17
2002
45,836.29
- 42.69
2003
15,966.68
- 65.17
2004
16,423.60
2.86
2005
54,735.66
233.27
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140
) 120
e
s
os
d
p 100
s
an
80
t
h
ou
ie
s
(
in
60
ilit
liab 40
al
T
ot 20
0
1994
1996
1998
2000
2002
2004
2006
Year
Figure 3. Graph of the total liabilities
Annual growth in total reserves. Every cooperative is mandated by law, the
Cooperative Code of the Philippines (R.A. 6939), to allocate a percentage of their net
surplus as reserve fund. The annual total reserve fund of the cooperative is presented in
Table 4 and Figure 3. The total reserve fund for the first three years were not available
due to incomplete records of the cooperative. The total reserve fund of the cooperative at
the end of 1997 was P52,678.65. This comprised of the general reserve fund, educational
fund, and optional fund. It increased in 1998 by 30.22% due to the increase in all the
three components but in 1999 there was no change in total reserves because the net
surplus was very small. In 2000 the amount of reserves doubled due to the high net
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surplus during the year. Again in 2001 there was a big increase (41%) due to a high net
surplus but from 2002 to 2004 the increment had been very minimal because of low net
surplus. In 2005 the total reserve fund declined by about 6% because the optional fund
was used to finish the extension of their building.
Table 4. Total reserves fund from 1997 to 2005
1994
TOTAL RESERVES
RATE OF CHANGE
(in pesos)
( % )
1997
52,678.65
1998
68,596.30
30.22
1999
68,596.30
0
2000
103,002.95
50.16
2001
145,123.39
40.89
2002
166,963.49
15.05
2003
174,913.54
4.76
2004
183,011.97
4.63
2005
172,362.53
-5.82
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200
180
)
e
s
os 160
d
p 140
s
an 120
100
s
(
i
n
t
h
ou
80
e
s
e
r
ve
60
R
al 40
ot
T 20
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Year
Figure 4. Graph of the annual total reserves
Net surplus. At the initial year of operation, the net surplus was P30,861.79. This
amount increased by 37.14% the following year. At the end of the third year, the amount
of net surplus more than doubled as of the prior year (57.74%) but in 1997, the fourth
year of operation, net surplus declined by 32% as of the previous year. Net surplus
became bigger in 1998 but on the following year it declined so much to only P13,370.20
or a 76% decrease as of the previous year. There was a large increase in 2001 but
declined in the next three years. It only increased in 2005 with a total net surplus of
P58,941.63 (Table 5).
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Table 5. Annual net surplus from 1994 to 2005
YEAR
NET SURPLUS
RATE OF CHANGE
(in pesos)
( % )
1994
30,861.79
1995
42,323.08
37.14
1996
66,759.02
57.74
1997
45,479.04
-31.88
1998
55,456.70
21.94
1999
13,370.20
-75.89
2000
17,686.52
32.28
2001
41,886.45
136.80
2002
37,440.17
-10.62
2003
24,714.47
-33.99
2004
23,138.34
-6.38
2005
58,941.63
154.70
Total asset. Total asset of the cooperative in 1994 was only P75, 367.54. This
became P566, 963.66 at the end of 2005. Table 6 and Figure 4 shows the amount of total
asset and the annual growth rate from 1994 to 2005. There was a continuous increase in
total asset from 1994 to 2006. In some years the growth was very fast but in some years
the growth was slow. The highest rate of growth was experienced in 1999 with about
92%. This was followed 1995 with 73% rate of increase then 1996 with 59%. On the
other hand, the lowest growth was experienced in 2005 with only 4% increase. The
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increment in total asset was depended on the increment in the paid-up share capital, the
liabilities, and reserves. It was noted earlier that there was an increase in paid-up share
capital, and total liabilities but there was a decline in the total reserves so this explains the
slow increment in total asset.
Table 6. Total asset from 1994 to 2005
YEAR
TOTAL ASSET
RATE OF CHANGE
(in pesos)
( % )
1994
75,367.54
1995
130,564.87
73.24
1996
208,899.89
59.10
1997
265,694.93
27.19
1998
319,829.68
20.37
1999
326,904.88
92.21
2000
375,821.57
14.97
2001
399,197.96
6.22
2002
450,379.91
12.82
2003
508,348.69
12.87
2004
543,108.03
6.84
2005
566,963.66
4.39
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600.00
500.00
s
o
s
)
400.00
a
nd pe
us
ho 300.00
s
s
e
t
(
i
n t
200.00
o
t
a
l
A
T
100.00
0.00
1992
1994
1996
1998
2000
2002
2004
2006
Year
Figure 5. Graph of the annual total asset
Changes in the Policies and Practices
Table 7 presents the changes in the policies and practices of the cooperative. It
can be noted from the table that there were changes and improvements in their policies.
The had increased the membership fee from P50.00 to P100.00 and the minimum share
capital from P500.00 to P1,000.00. It was found earlier that the number of members had
been increasing. This implies that even though the membership fee and the minimum
share capital increased, new members were willing to pay the higher amount inorder to
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become members of the cooperative. Another change in their policy was the imposition
of fines to members who do not attend the general assembly meeting and the fines of the
officers for not attending meetings was also increased from P50 to P100 per absence
during a meeting. The cooperative imposed this penalty to discipline the members and
officers. They can only be informed about the policies of the cooperative when they
attend general assembly meetings. As a result of these new policies and practices
majority of the members and the officers are aware of the policies of the cooperative.
Another improvement in their practice was the giving of honorarium to volunteer
workers.
Table 7. Old and new policies and practices of the cooperative
OLD POLICY/PRACTICE
NEW POLICY/PRACTICE
Membership
- Fifty pesos (P50.00) membership fee - One hundred pesos (P100.00)
Minimum Share Capital
- Five hundred pesos (P500.00)
- One thousand pesos (P1,000.00)
Loan
- Loan ceiling was 80% of share capital
- 2 to 3 times the share capital
- Interest on regular loan was 1.5%/ mo.
- 2% per month
Attendance to General Assembly Meeting
- no fines to members who do not attend
- P50 fine
- P50 fines for officers who do not attend - P100 fines for officers who do not
attend
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Table 7. continued …
Giving of Honorarium
- No honorarium for volunteer workers
-volunteer workers are given minimal
honorarium
Problems of the Cooperative
The vice chairman of the board identified the following problems met by the
cooperative: lack of training and education of members regarding the operation of the
cooperative, delinquency of members in paying their loans and accounts in the
cooperative, inadequate knowledge and skills of officers regarding the operation and
control of the cooperative, lack of motivation of some staff in doing their job, and fast
turnover of sales lady.
On the lack of training and education of members, some members were not able
to attend trainings and seminars because they were busy in their work and in their
families. Because of economic reason, some prefer to work for a pay than to go and
attend seminars. In most cases, only the officers are attending seminars and trainings.
Since majority of the members were farmers, their source of paying their loans and
accounts in the cooperative is from their farm production. When they could not sell their
product then they could not pay their loan. Some of the officers have low educational
attainment thus they have difficulty in acquiring and skills necessary in their respective
functions. On the lack of motivation of some staff and fast turnover of the sales clerk was
due to the lack of monetary incentives. The officers were not given an honorarium or per
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diem when they attend meetings and the salary of the staff is very low that they even
prefer to work as a laborer in the farm because the wage rate is more.
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SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
The Lusod Agrarian Reform Community Multipurpose Cooperative was
organized by the 49 agrarian reform beneficiaries as a window for technical and financial
assistances. One objective of the cooperative was to develop an appropriate system of
land tenure, land development, and land consolidation or land management in the areas
covered by agrarian reform. The study was conducted primarily to assess the growth of
the cooperative in terms of its membership, paid-up share capital, total liabilities, total
reserves, and total assets; to find out any changes and improvement in their policies and
practices; and to identify problems of the cooperative and come up with solutions or
recommendations for the improvement of LARCMPC.
The manager and some members of the Board of Directors served as the sources
of primary information while secondary information was taken from the records and
reports filed at the cooperative office. This study was conducted from December 2006 to
January 2007 at the cooperative office in Lusod, Kabayan, Benguet.
The result of the study showed that there was growth in membership, paid-up
share capital, total reserves, total asset and even in the total liabilities. The amount of net
surplus per year had been fluctuating . There were some years that it increased and there
were also years that it decreased. There had been increment in membership every year
except for 2006 that it remained. The paid-up share capital and the total asset had been
continuously also. There were some years that the increments were high and there were
some years that increments were low in both the share capital and the total asset. The
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growth in total reserves had a different behavior. There was no growth in 1999 then there
was high growth for the next two years then slowly increased for the next years but in
2005 there was a slight decline in the total amount of reserves. The total liabilities
increased from P10,000 in 1995 and 1996 to P100,704 in 1997. The total liabilities had
been continuously decreasing from 1998 to 2004 as the cooperative had been paying its
liabilities but in 2005 it increased again due to the increase in savings deposit, and
undistributed net surplus.
As to the policies and practices of the cooperative there was not much changes
and improvements except for some adjustments in the credit policies. The problems of
the cooperative were the lack of education of members, poor knowledge and skills on
cooperative management by the officers, loan delinquency and the fast turnover of sales
lady due to low salary.
Conclusions
1. The membership was limited only to the residents of barangay Lusod so this also
limits the growth in membership of the cooperative.
2. There was growth in paid-up share capital but it was also limited due to the
limited sources of income of the members and the limited number of members.
3. The total reserve fund had been increasing every year because of the
accumulation of the general reserve fund, optional fund and the cooperative
education fund-local.
4. There was not much change in the policies and practices of the cooperative.
5. There was fast turnover of sales lady in the consumer store due to low salary.
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Recommendations
1. The Board of Directors should amend the by-laws of the cooperative to open
it membership to other people residing in nearby barangays and then intensify
the education and campaign for membership so that the number of members
will expand.
2. The Board of Directors should come up with a capital build-up program so
that members will add to their paid-up share capital.
3. The cooperative should use its CETF to educate its members by sending them
to seminars/trainings or by conducting the training themselves. In this way the
members would have a better understanding about cooperative. They should
target educating the members first and not concentrate on the officers only.
4. The salary of the sales lady should be increased so that she will stay long in
the cooperative. Besides, incentives of other management staff should be
increased also so that they will be encouraged to give their best service in the
cooperative.
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LITERATURE CITED
CATAO, MARFELYN. 2005. Gipah food and beverage processing center: A case study
on the special project of Lusod Agrarian Reform Community Multi purpose
Cooperative. BS Thesis.Benguet State University, La Trinidad, Benguet. P 1
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EXHIBIT 1
ORGANIZATIONAL STRUCTURE OF LARCMPC
GENERAL ASS
EMBLY
Audit & Inventory
Board of
Credit
Election
Committee
Directors
Committee
Committee
Treasurer
Education
Committee
Secretary
Manager
Accountant/
Gipah Food and
Cashier/Collector/
Bookkeeper
Beverages Processing
Storekeeper
Center Staff
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APPENDIX A
DUTIES AND RESPONSIBILITIES OF MEMBERS
1. Contribute to the capital of the cooperative through share capital contributions,
payment of membership fee, savings deposit and other means as provided in the
by-laws and as per policy formulated by the general assembly and the board of
directors;
2. Patronize the services and business of the cooperative;
3. Actively participate in general assemblies and other activities of the cooperative;
4. Pay/his/her accounts and obligations as they become due and payable;
5. Vote/appoint for qualified, competent, honest, respectable and dedicated members
of the cooperative as per by-laws;
6. Attend trainings, seminars, workshops, and others as directed/requested by the
Board of Directors or Management; and
7. Promote and advertise the cooperative and its business and services.
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APPENDIX B
POWERS, DUTIES AND RESPONSIBILITIES OF THE BOARD
1. Act on membership application;
2. Terminate membership;
3. Elect and /or appoint officers;
4. Appoint committees, delegate powers thereto and fill vacancies therein;
5. Determine the compensation of certain officers and employees;
6. Determine the adequacy of bonds of accountable officers;
7. Fix the date of regular, and call special meetings of the general assembly;
8. Hold regular and special meetings to act on the business affairs of the
cooperative;
9. Admit as directors or committee members appointees from credit or financial___;
10. Fill up vacancies in the board;
11. Raise revolving capital as authorized by the general assembly; and
12. Present complete audit reports to the general assembly.
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APPENDIX C
OFFICERS AND THEIR DUTIES AND RESPONSIBILITIES
Chairman of the Board
1. Sign all contracts and agreements, which the cooperative may enter into.
2. Sign pertinent transactions involving the manager.
3. Approve/disapprove the loan of the manager.
4. Perform all acts and duties actually performed by the Presiding Officer.
5. Perform such other duties as the board may prescribe.
6. Assists the manager in all business transactions.
7. Prepare agenda of the meeting with the manager.
8. Preside overall meetings of the cooperative and the Board of Directors.
Vice Chairman
If the Chairman is absent in the case of disability or incapacity of the Chairman,
the Vice Chairman shall perform the duties and responsibilities of the Chairman.
Treasurer
1. Take the custody of all money, securities and prepares list of acquired properties
by the cooperative and maintain complete records of all its transactions.
2. Pay all financial obligations incurred by the cooperative approved by the
manager/or board of directors.
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3. Turn over all money, securities, papers books and other properties belonging to
the cooperative in his possession to his/her successors upon the
expiration/termination of his/her term of office.
4. Post an adequate bond to assure the faithful performance of his/her duties.
5. Sign and process pertinent documents upon authorization of the board of
directors.
6. Keep a complete record of cash transactions for a proof of cash position at any
given time and date.
7. Render reports and certify the correctness of cash position of the cooperative in
all financial statements and other records submitted to the board of directors, the
general assembly in the cooperative the CDA.
8. Perform duties of the secretary in the absence or inability to his/her duties as may
be prescribed by the board of directors.
Secretary
1. Keep and maintain a complete registry of all members and record of all minutes
of meetings of the board of directors and the general assembly.
2. Keep and maintain the share and transfer book, serve as custodian of the corporate
seal of the cooperative.
3. Give notice of all meetings called.
4. Turn over all books and records and other properties belonging to the cooperative
in his possession to his/her successor upon the expiration/termination of his/her
term of office.
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5. Perform the duties of the treasurer in the case of his/her absence to perform
his/her duties.
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APPENDIX D
DUTIES AND RESPONSIBIULITIES OF THE MANAGEMENT STAFF
General Manager
1. Shall undergo policies set by the general assembly and the Board of Directors and
has general charge of all the phases of the business operation of the cooperative.
2. Render reports monthly, annually or as may be required by the Board of Directors
or the general assembly, and preserve the books, documents, correspondence and
records of whatever nature concerning the operations of the cooperative which
may come into his possession.
3. He may employ, supervise and/ or dismiss any agent or employee in the
management force.
4. Shall maintain records and accounts of the cooperative in such manner that the
true condition of its business may be ascertained at any timer.
5. Recommend policy to the Board of Directors based on the operations of the
cooperative.
6. Post an adequate bond to assure the faithful performance of his duties.
7. Source out funds in cash or in kind (with the confirmation or approval of the
Board of Directors).
8. Perform other duties as the Board of Directors may prescribe and turn over to his
successor all properties belonging to the cooperative in his possession or over
which he has control upon the expiration/termination of his services.
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Accountant
1. Shall install an adequate and effective accounting system in the cooperative.
2. Render monthly reports to the general manager and board on the financial
condition and operations of the cooperative and annual reports to the general
assembly as required.
3. Contract and record whatever kinds pertaining to the business of the cooperative
that may come to his possession.
4. Coordinate with the manager and the audit and inventory committee in assisting
the board in the preparation of the annual budget.
5. assist the Chairman of the Inventory Committee in the preservation of the books
of accounts, documents and vouchers.
Bookkeeper
1. Shall see to it that cash received by the treasurer, cashier, or collectors are
properly receipted and duly accounted for.
2. Shall record in the books of accounts all transactions of the cooperative and see to
it that they are properly supported by the prescribed accounting forms and
supporting papers.
3. prepare monthly bank reconciliation of all cash in bank accounts.
4. Prepare the trial balance and financial statement monthly or quarterly as required
and make available to the general manager and board of directors.
5. Check the daily summary reports required of these are submitted with the attached
supporting papers.
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6. Reconcile his/her records with the treasurer’s or cashier’s records on the cash
position at least on a weekly basis.
7. Compute interest on savings accounts on a quarterly basis.
Storekeeper
1. Responsible for the proper display of goods and other commodities in the
cooperative store.
2. Responsible for the sale of goods and other commodities in the consumer’s store.
3. Sell goods over the counter for cash or on account depending on the policies
formulated by the Board of Directors.
4. Record the purchases of the members indicating the member’s name, goods
purchased, amount of purchase and the date purchase.
5. See to it that the store is secured before leaving hid/her workplace.
6. Prepare daily sales summary reports at the end of each day and submit to the
treasurer/cashier together with the cash collectors.
7. Assist in the collection of store accounts if credit sales are allowed as per policy.
8. Make a periodic reports to the general manager regarding store operations.
9. Make a listing of goods and other items to be purchased.
10. Keep the store and premises clean and orderly at all times.
Cashier
1. Receive cash from all sources as determined by the Board as an accountable
officer.
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2. Assist the treasurer in the payments of obligations by issuing checks based on the
approved vouchers and signed b y the authorized signatories.
3. Ensure safety of all documents under his/her custody.
4. prepare daily summary report indicating the amount of cash received, the sources
and the inclusive receipts issued, deposits and disbursements made during the day
including the payees, voucher numbers and check numbers.
5. perform such other functions as may be assigned by the general manager or
treasurer.
Collector
1. Responsible for the collection of payments of loans and other accounts and
obligations payable to the cooperative.
2. Submit daily cash payment collections to the cashier or treasurer.
3. Make periodic reports to the Loans Officer and/or General Manager on the status
of accounts.
4. Distribute collection letters, demand letters, statements of accounts and other
notes.
5. periodic summary of collections indicating the payees name, amount paid, date of
payment of an account classifications.
6. Perform such other functions as assigned by the Loans Officer or General
Manger.
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APPENDIX E
INTERVIEW GUIDE
1. Who initiated the organization of this cooperative?
2. What government agency and non-government organizations were involved in the
organization?
3. What was the purpose of the cooperative?
4. Who were the first leaders of the cooperative?
5. Who were the first members of the Board of Directors and officers of the
cooperative? Incorporators or cooperators?
6. How much was the initial capital? Initial members?
7. How was the operation started?
8. Did all the members attend the pre-membership education seminar?
9. Who conducts the PMES? How regular is the conduct of PMES?
10. Were there cases of withdrawal of members? What were the causes of
withdrawal? How many members withdraw every year?
11. What factors affect the increase/decrease in your total asset?
12. Did you amend your by-laws? How many times?
13. Were there changes in your policies and practices? What old policies and
practices were changed and what are the new ones?
14. Do you stick to your policies in your operation or were there cases that you
disregard your policies to suit the situation?
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Lusod Agrarian Reform Community Multi-purpose Cooperative:
A Documentation / Terma D. Baguista. 2007
Document Outline
- Lusod Agrarian Reform CommunityMulti-purpose Cooperative: A Documentation
- BIBLIOGRAPHY
- ABSTRACT
- TABLE OF CONTENTS
- INTRODUCTION
- Background of the Study
- Objectives of the Study
- Scope and Limitation of the Study
- Importance of the Study
- METHODOLOGY
- RESULTS AND DISCUSSION
- Organizational Structure of LARCMPC
- Financial Growth of the Cooperative
- Changes in the Policies and Practices
- Problems of the Cooperative
- SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
- Summary
- Conclusions
- Recommendations
- LITERATURE CITED