Objectives of This Chapter
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Chapter 4 Project Formulation, Preparation, Feasibility Analysis and Project Design
Objectives of this Chapter: 1. Know the major steps in institutional planning. 2. Enumerate the important procedures in designing of programs/projects and the organization structure. 3. Understand the major parts of the proposed program/project. 4. Prepare project proposal.
Introduction Our main objective now is to deal with the program and project proposal preparation.
After studying the previous chapter, you are now very much familiar with the meaning of programs and projects.
The scope of programs and projects could be national, regional, provincial, municipal, or just local. Nowadays we have programs which are global in scope.
How do we get started in the program/project preparation?
Before we go to this let’s have a look at a broader spectrum where program preparation/design is only a part, and this is institutional planning. Under this there are 13 major steps categorized under three captions:
I. Thinking and Self-Appraisal 69
1. Know Yourself 2. Know Your People 3. Know Your Resources 4. Know Your Environment
II. Evolving a Conceptual Framework 5. Form General Ideas from Self-Appraisal 6. Design Conceptual Framework 7. Consult Constituents on Conceptual Framework 8. Work Towards Board Approval of Conceptual Framework
III. Designing Programs/Projects and Organization Structure 9. Assess Existing Programs/Projects Based on Conceptual Framework 10. Decide Which Programs/Projects are to be Improved, Phased Out and/or Created 11. Design Programs/Projects and New Organization Structure 12. Work Towards Obtaining Board Approval of Programs/Projects and New Organization Structure 13. Initiate Final Review for Implementation
Now that you have an overview of the different principal components of institutional planning, let’s concentrate on the third major category, designing of programs/projects and the organization structure.
Consider the following important procedures:
1. Assess Existing Programs/Projects Based on Conceptual Framework
Program/Project Assessment Based on Conceptual Framework
This includes the organization of study groups, establishing a linkage and monitoring mechanism, scheduling of activities and time frame, and program/project assessment.
1. Organization of Study Groups The volume and nature of work to be done must be determined so that the number of members and the expertise needed will be known.
2. Establishing a Linkage and Monitoring Mechanism The different persons, offices and agencies must be identified inside and outside the institution so that time and cost may be determined.
3. Scheduling of Activities and Timeframe Schedule of activities and timeframe must be prepared and approved by all members concerned and management for the smooth flow of work.
4. Program/Project Assessment 70
The following are areas of concerns which should be answered if you want to avoid bottlenecks in the future.
a. Problem Area What are the specific problem areas that the program/project is presently encountering?
b. Pro-Factor What does the program/project have in terms of men, money and materials?
c. Con Factor What constraints are present or what does the program/project need, in addition to what it already has if any?
d. Mission What mission should the program/project address itself?
e. Strategic Action What strategic actions are to be recommended so that the problem areas identified can be minimized if not completely solved, and the mission recommended attained?
2. Decide Which Programs/Projects are to be Improved, Phased Out and/or Created
The decision here will depend on the related policy statements in the conceptual framework.
3. Design Programs/Projects and New Organization Structure
Program/Project Proposal Format The format for a program/project design may vary according to the needs and perceptions of the individual groups. However, it is recommended that a uniform format be used for purposes of comparative analysis, evaluation and monitoring.
Six major parts of the proposed Program/Project:
1. Program/Project Summary This part should contain the following: a. The general objective of the program/project accompanied by a statement of the general idea of the proposal. b. The general thrusts of the proposal. c. The relationships that the program/project will forge from within and without the organization; stressing the general benefits of such linkages. d. The outputs of the program/project. e. Organization and management of the program/project. 71
f. Implications for development in the immediate environment, region and the country as a whole. g. The legal basis/bases of the proposal if any and its relevance to regional and national policies. h. Total financial requirement and a proposal on how this is to be allocated among the program/project major activities in percentages.
2. Rationale Statements For this part some aspects must be considered: a. Needs. These are the gaps between the supply and demand in terms of different resources. b. Justifications. The rationale behind the needs. c. Objectives. These are general and specific statements describing observable and measurable performance likely to indicate change due to the impact of the program/project. d. Special Features. Distinct concepts and strategies unique to this program/project. e. Implementation and Development This shows the timetable, options, resources and the ultimate results once the program/project is fully implemented. f. Organization and Linkage This presents the organization structure design of the program/project, indicating the vertical and horizontal relationships of the structure. Strategies to operationalize the linkages drawn within and outside are indicated and explained.
3. Program/Project Structure This should show the relationships of concepts to activities. This is important and critical towards making decisions whether the program/project really reinforces all others to be developed or simply duplicates some concepts or projects already in existence
4. Major Assumptions a. Clientele a.) Topics b.) Qualifications desired c.) Desired number to be served in the target years d.) Screening process that they will have to go through
b. Resident/Resource Staff a.) Total staff requirement b.) Field specialization and title of position c.) Screening process d.) Staff development program to be matched against the overall long-range staff development program of the institution
e.) Salary range recommended f.) Policy statements on staff management
c. Equipment a.) Major equipment with a description of its use b.) Other smaller equipment and their uses 72
d. Library Needs / Other Needs Indicate the quantity and costs
e. Physical Plant and Site Development a.) Description of the plant and its major components b.) Desired design of the plant and the preferred materials to be used c.) Location or where the plant will be built, which direction it should face, etc. d.) Recommended alternatives where activities may have to start if the plant will not be finished on time as projected e.) Other details on cost per square meter and total floor space requirements
f. Evaluation and Monitoring a.)This is the manner and method of evaluating the program/project from planning to implementation process. b.)The manner and method how end-result evaluation is to be undertaken. c.) How those involved in it may go through the process and what decision are expected of it. d.)How the above processes can be a part of the entire evaluation process of all projects and programs in the institution, based on the conceptual framework.
g. Budget Requirements The budget requirements of the proposed program/project must be presented in the prescribed forms of target benefactors.
5. Design Organization Structure The policy statement is the basis of the design of an organizational structure because the policy statement embodies the general principles of management and operations. The components of the organization structure are the programs and projects of the institutions and their support services.
6. Work Towards Obtaining Board Approval of Programs/Projects and New Organization Structure
a. New Programs. There should be prioritization on the proposed programs/projects and these should be submitted to the board earlier for approval
b. Organization Structure. The rationale for this new organization structure design is based on the intent and purpose of the policy statement on organization in the conceptual framework, on the interrelationships of the programs and projects as well as their support as they fall under various administrative levels.
A checklist of terms accompanied by function descriptions whether they are line or staff positions. The profile of the people who are occupying or are going to occupy the positions. A brief bio-data of each indicating the person’s educational qualifications and administrative experiences are considered necessary. The 73
necessary. The organization structure is the key to the success or failure of institutional planning and development.
7. Initiate Final Review for Implementation Focus must be directed at people – what they will do, how they will do it, and how their performance will be measured. Their functions must be translated into operational activities. The activities of all those occupying positions in the organization structure must be determined and programmed. These are reflected in the program of work.
A monitoring system will then be devised to track down the process of analyzing and making decisions about the periodic results of the projected activities in each program of work, from bottom to middle and top management, and their corresponding staff units and vice versa.
The program of work and its monitoring system should first be designed and understood and accepted before any attempt at implementing the new organization structure is done. The program of work and its monitoring system should be made clear to all. All the participants should therefore be thoroughly oriented on the instrument, how to accomplish it, when to pass it for analysis and decision-making, and when to retrieve it.
Unless this is adopted as a matter of strategy, any modified or completely new organization structure would meet extreme difficulty in subsequently implementing programs and projects. Only when the new organization structure meets the above requirements should the new programs be implemented.
Project Formulation, Preparation and Feasibility Analysis: Major Planning and Operating Functions
1. Refine project objectives and targets 2. Define potential components or elements 3. Evaluate and rank alternative potential design configurations 4. Determine appropriate project size and location 5. Refine project justification analysis 6. Provide detailed cost estimates and estimate potential benefits 7. Prepare financing plan 8. Secure preliminary government review and approval 9. Obtain preliminary review by possible funding agencies 10. Analyze preconditions for successful implementation 11. Perform site and location studies 12. Perform technical, commercial, financial and economic pre-feasibility evaluation 13. Obtain market and demand studies 14. Calculate preliminary least-cost or cost-benefit estimates 15. Prepare formal project prospectus 16. Obtain formal feasibility study 17. Begin data collection for appraisal 18. Secure initial commitments of counterpart funding.
Let’s have a break. You may have your snacks. Read the day’s paper. 74
After reading so many pages I know that you start to feel that the task of program/project preparation is quite a big task. I felt the same way when I first started to prepare a program for education and project feasibility for business and hospital.
The key or solution of course is to see a sample of a program and a project. After reading 3 or 4 samples, I was ready to start my own. So, as a starter I have included herewith samples of programs, projects, and project feasibility study.
The Project Proposal
Do you know what a project proposal is?
A project proposal is a plan of action for undertaking a project.
We are preparing proposals for various reasons. Can you identify some of your reasons? At this point, please write your reasons in separate paper. Check them against those given here.
Project proposals are used as: a) a means of communication b) a plan of action c) a contract
Have you written in separate paper all the above reasons? If yes, Very Good!
We are writing proposals because they serve to communicate the proponent’s plan to those who provide consultation, give consent, and provide funding. The quality of assistance, the economy of consultation and the probability of financial support will all depend directly or indirectly on clarity and thoroughness of the proposal.
The proposal serves as a plan of action. It includes the activities to be done, the strategies to be used, the people involved, the budget and other resources needed. The approved grant proposal results in a contract between the project proponent and the funding source.
We have already enumerated the purposes for preparing project proposals. What would be the parts or elements of your project proposal? You know, the formats of a project proposal differ according to funding agencies but the basic elements are similar to each other. 75
A project proposal, when used for applying financial assistance, is prepared with the evaluation criteria of the target donor in mind. This means that it has to fit the donor’s priorities, concerns, terms of reference, format if any, following endorsement channel and finally following the right administrative channel in the donor agency.
A well-written research project proposal is expected to include the following sections:
I. Executive Summary. This is the capsule of the proposal which includes needs; justification; expected beneficiaries; expected benefit; the technical details: objective; procedure; kind of research; duration; what support is requested, and information about the proponent.
II. Justification. This includes why the study is needed; who the intended beneficiaries are; what the expected benefits are; why the proponent is doing the research; and what the capability of the institution to do the project is.
III. Technical Proposal. This includes the research problem; research objective; research approach; procedure/methodology; duration; phases; and work plan
IV. The Proponent. This is important for marketing the proponent institution. This should include: mandate; track record; capability; assets; present thrusts; human resources; and leadership.
V. Project Organization and Management. Here, it is described how the project will be structured organizationally and how it will function in relation to the proponent agency.
VI. Implementors. This should include the resumes and CVs of the people who will be involved in the project. Availability, special training, experience and previous work should be emphasized.
VII. Institutionalization. It is important to cite what commitment the institute has to continue working on beyond the project’s duration.
VIII. Budget. Details of items of expenditure, number of units and cost should be included. This is usually broken down into: personal services; maintenance and operating expenses; capital outlay; and administrative cost.
Stages and Phases in Project Formulation
There are three stages of the project cycle which are carried out in sequence. Under each stage are constituent phases. The framework for project formulation is as follows: 76
Stage of Formulation Phase
Identification Preparation for project formulations
Reconnaissance and preliminary project design
Preparation Project design Analysis of expected results Project of documentation and Submission
Appraisal Negotiating the project
Steps and Outputs in the Project Formulation Process
Phase I. Preparation for Project Formulation
This involves all activities required to prepare a sound formulation of the project.
Step 1 – Project inception. The project formulation process starts with the project idea. At this point, it is desirable to prepare a brief project description and draw out terms of reference setting up the geographical boundaries, institutions involved and target group.
A logical framework is also required at this point which will set the indicators or criteria; means of verification; and major assumption.
Step 2 – Formulation of a work plan. This step involves planning for effective work implementation.
The output from Phase I is the program of work for project formulation.
Phase II. Reconnaissance and Preliminary Project Design
There are four steps involved in this phase.
Step 3 – Analysis/diagnosis of the project situation. This step is intended to understand the development problems in the area relative to aquaculture and/or fisheries, and the possible solutions. Under this activity, the following are done: review of national, regional and sectoral background; general evaluation of the project sub-sector which include the physical feature; infrastructures, economic activity, socio-economic features, institution and policies; and identification of possible courses of action. Step 4 – Analysis of the project having regard to the people involved. The questions of concern under this step are: what do people do? What do they consume and produce? What are the aquaculture or fisheries production systems or practices? The proposed courses of action are also discussed. 77
Step 5 – Assessment of the future “without the project”. This involves the assessment of the impact of the project by analyzing and evaluating prospective changes which will take place in the absence of the project such as projected demographic, demand, supply and price changes.
Step 6 – Outline specification of a possible project. This step results in the preparation of a prefeasibility report which includes biological design criteria; facility characterization; programming infrastructure; site studies; schematic design; financial analysis and environmental analysis.
The output of the second phase is a preliminary design of the project which include identification of its main features (location, type of participants, size, timing, organizational structure) and management system.
Phase III. Project Design
This phase initiates the formal detailed project preparation stage.
Step 7 – Detailed technical and socio-economic investigation. The information that may be included in this step are market studies; availability of inputs; costs and earnings; and farm systems employed among other things.
Step 8 – Definition of project objectives, targets and design criteria. This steps involves a review and redefinition of objectives; specification of project parameters (demarcation of project area/zone; selection of agents; confirmation of selected technologies and management practices; phasing and timing of activities); confirmation of design criteria; and preparation of work plan.
Step 9 – Design on individual project components. The components are separated into categories as: production component (facilities such as farms, hatcheries, etc), production support components (credit, extension, research); social support components (infrastructures and services); and technical assistance.
Step 10 – Design of organizational structure and management arrangements. This task is to decide which groups or groups is responsible for project implementation and operation; and how they are expected to perform these functions.
Step 11 – Estimation of project costs and revenues and proposals for first financing. The three main activities under this step are: completion or estimates of all individual component costs; consolidation of all costs into overall project costs; and preparation of financing plan.
The output of Phase II is a full description and costing of the project, together with a proposed financing plan.
Phase IV. Analysis of Expected Results
The fourth phase in concerned with activities necessary to assess project results in terms of outputs, effects and impact on the sector and other sectors. The basis of the analysis is the project design report.
The work involves four steps, namely:
Step 12 – Financial analysis
Financial analysis considers the project as a business proposition. There are two main approaches to financial analysis, namely (1) cash flow and benefit/cost analysis, and (2) income and 78 expenditure analysis. These analyses are always made to show the expected impact of the project by comparing the “with- and without-project” situations.
Step 13 – Economic analysis
This is an appraisal of the project in terms of its contribution to economic development to the society as a whole. It analyzes impact on economic growth; foreign exchange balance and income distribution.
Step 14 – Social analysis
This step assesses changes in the lives of individual and communities as a result of the project such as effects on employment, nutritional effects, impact on health, etc.
Step 15 – Environmental impact
This analysis aims to identify renewable and non-renewable resources used by the project; sensitive points adversely affected; risk of pollution from aquaculture activities and related processing activities; and ecological sustainability of the production system.
The output of Phase IV is the determination of effects and impacts of the project.
Phase V. Project Documentation and Submission
This concerns activities necessary for the preparation of a final project document, complete with design and relevant analysis. The work in the fifth phase is described in one step:
Step 16 – Preparation and submission of the project report
There are four main activities under this step:
a. Deciding the structure of the report b. Writing and production of the report c. Submission of the report and its presentation d. Finalizing the report
Step 16a – The report structure
The typical sections and potential leaders are:
a. The summary. This is targeted for top policy makers. It provides a self-contained picture of the project and all its implications, in no more than 2-3 pages.
b. Main report. This might be for non-technical senior managers. This is written in a consistent style with well-balanced section. It provides a concise description of the objectives, findings, conclusions and recommendations.
c. Appendices. This is usually read with considerable thoroughness by heads of technical departments and technical specialists. These are self-contained analysis of a single major aspect of the project. These are the building blocks from which the report is constructed. 79
d. Working papers. These are for detailed examination by the appraisal team. These are essentially files on basic data, assumptions, estimates and calculations from where the appendix are based and analyzed.
Step 16b – The contents of the report
Writing a good report is a skilled job. One must follow the five basic principles in report writing, namely keeping the report:
a. Simple, avoiding unnecessary jargon; b. Direct, avoiding disgressions, unless necessary; c. Lucid, being understandable by an intelligent reader and free of ambiguity; d. Vigorous, sustaining the reader’s interest, presenting arguments with convictions and conclusions with confidence; e. Brief, but not to the point of sacrificing important material.
For a production project, the report usually includes the following sections:
a. Summary. Highlights key findings and conclusions. Normally it is not longer than 2-3 pages in length.
b. Introduction. Provides a context and setting within which the proposal have been formulated.
c. Background. Introduces the important features of current aquaculture/fisheries development, reviews trends in the sector, describes the functions and organizations of institutions involved in the sector.
d. The project area or sub-sector. Prepares the ground for explaining project design.
e. Rationale for the project. This includes a concise description of all major features of the project; presents a summary of cost estimates and financing plan.
f. Organization and management explains how institutions and agencies participate in the implementation and operation of the project.
g. Markets and prices show how the inputs and outputs of the project will be traded and how these are expected to change in the future.
h. Financial and/or economic implications describe the results of the financial and economic analyses.
i. Project justification. Other impacts and risk of the project are presented in this section. This is often the first part of the main report to be read by the decision makers. Concentration of the section is on the benefits of the project.
j. Major outstanding issues which must be resolved and the corresponding steps to be taken constitute the last section.
Step 16c – Report submission and preparation 80
A covering letter is a useful addition to a project formulation report. This letter includes information on the circumstances in which the formulation study was commissioned, who carried out the report and when. If a verbal presentation is made, it should be carefully prepared. It should be concise, but complete with relevant details and well-illustrated by several visual aids.
A case is presented here for you to analyze. This is a very good example of what is happening whenever we submit proposals, whether it is development project or research project proposals. Please read this carefully. 81
THE CASE “Rejections, Why?”
Dr. Vera Cruz is a successful project officer connected with an international foundation supporting research and development programs. She has been going around Africa, Asia and Latin America promoting certain ideas on rural development and evaluating research proposals. She can be considered an expert in project assessment and evaluation. During her home leave, a number of her old friends, knowing how successful she is in her career sought her out for some advice.
Ms. Lita Barsana is a niece of Dr. Cruz. She is currently Executive Director of a non-government organization whose mandate is to provide training and management services in depressed provinces in the country. She is new in this job. For many years she taught and did management research in a prestigious management school in Manila. She has 2 books and 15 journal articles to her credit.
Ms. Barsana invited her aunt to her institution ton show off its accomplishments. While the institution is viable because of a large endowment and trust fund largely coming from donations of rich unmarried women, lately it has not been that flattering to Ms. Barsana. In the year that she has been Executive Director, she has received five rejections out of six proposals she has presented to foreign and local donors for funding. In fact she is quite disappointed with herself. These regret letters are reflecting on her executive abilities even if the actual details of proposal preparation are done by her project officers.
Ms. Barsana asked her aunt for advice on how to improve her track record in obtaining project grants. Dr. Cruz, who is really adept at this kind of a problem, thought that she should first know the background and circumstances of the five proposals which were turned down and the one which came through.
Ms. Barsana was just too happy to give her aunt an exhaustive briefing on each of the proposals. The folders foe each proposal were pulled out and given to Dr. Cruz for study. Ms. Barsana seemed confused and dejected. She thought she did what was supposed to be done in proposalIn preparation. her endorsement letter Ms. Barsana thought she did the right thing. For instance, she appealed thus “Our institution is composed of highly Indedicated all the and six intelligent, proposals, fresh Dr. graduate Cruz noticed (BS degrees). that the Their need good and servicesjustifications would were be highlighted.felt by the institution The areas for of many concern years. chosen If only were they noble.would beThey given were related funding to forrural their poverty research, and its alleviation. they would Of acquirethe five proposals research experiencewhich were whichturned could down, be three an asset were to related the institution to research ten yearsand publication, from now. Ourwhich institution was the strength at present of Ms. does Barsana. not have The other budget two for were research sent to andUN publicationagency dealing that iswith why foreign we are political appealing refugees. to your generosity.”
Another rejected proposal was reviewed by a researcher (as commissioned by the donor) who had done practically the same study for the past three years.
In four of the six proposals submitted for funding that year, the project insiders were part-timers from the university where Ms. Barsana used to work. In fact, these four highly qualified individuals have been doing that kind of research and are merely transferring the venue because their University projects just terminated. 82
Participant’s Task
Assume that you are Dr. Cruz. The next day, you are to give a seminar to the technical staff of the institute. What is it that you would be telling the institute staff so that they will improve their track record in getting external funding?
Are you through reading the case? Did you understand it? Please answer the following questions:
1. Please cite at least four reasons why the proposals were not approved.
2. What is the mandate of the NGO?
3. What is the main objective of the proposals?
If you were Dr. Cruz who is requested to give a seminar to the technical staff of the Institute, what would you discuss with them so that they will improve their track record in getting external funding?
Please write an outline of your talk before you turn the page.
Thank you and congratulations! You may now turn the page and read through the Expert’s Analysis. (Please read only after analyzing the case) 83
EXPERT’S CASE ANALYSIS Rogelio V. Cuyno
Introduction
Apparently this organization is indeed a highly committed group giving service to a selected client group. Most non-government organizations are like that. Their mission is service and they attract young people who are idealistic. They are more ______and action-oriented and are not as internally differentiated as a huge government bureaucracy. It is not surprising to see people doing a variety of things at the same time in this type of organization.
By going back to the facts of the case we can discern certain reasons why Ms. Barsana has not had much luck in having project proposals approved. While the justification and need in the proposals were noble and strong because they dealt with humanitarian concerns such as rural poverty, there are other practical and administrative technicalities which resulted in default.
The first technicality was on the mandate of this non-government organization (NGO). This NGO is basically an action and service-oriented institution, yet there are proposals whose objective is research and publication-related. Most donors would want to examine proposals to find out if these proposals contribute to organizational goals. Donors would want to be of help to organizations trying to fulfill their mandates and thrusts. Any disgression from organizational mandates and thrusts is suspect because this is an indication that the project would have a problem of sustainability and could lead to lack of focus. Ms. Barsana might have her strength in research and publication, but this does not mean that she can impose her personal interest on the organization which clearly was not established for this purpose. In fact her own board should have called her attention to this disgression. Any disgression like this will surely affect attainment of the main “business” of the institution, which is 84
action and service programs. The second technicality was that the potential donor to whom the proposals were sent was the wrong kind. A UN agency dealing with foreign refugees would certainly not use its resources for the purpose of rural development no matter how noble this objective is. This is a form of technical malversation, something that is heavily sanctioned.
The third problem is the lack of internal organizational capability. Research work requires advance training and experience. Any donor would want to see the recipient succeed in the project. Donors, knowing that they can only support the recipient in a limited way, would want to put their resources where there is greater absorptive capability and capacity. In this particular NGO, the research to be involved in the project were raw talents without much training in research. If the purpose of this project is to train future researchers the project rationale and purpose should be so stated. Some donors have capability-building as one of their mandates.
The fourth problem is duplication of effort. It was tough luck that the potential donor got a project reviewer who happened to have personally been working on the same problem. Donors would want their resources applied to a specific concern. They would rather add funds to current recipients to make them more effective than spread thinly to more research institutions doing the same thing. Spreading resources thinly to more research institutions engaged in the same problem would only foster destructive competition.
The fifth problem is lack of effective commitment. The fact that in most of the proposals the proposed project leaders were not employees of the said NGO and would only be doing this on a part-time basis, had worked against the proposals. In their experience, donors know that part-timers would have problems dividing their time between the project and their
To conclude and summarize, we can cite certain principles in program generation and proposal preparation relevant to this case.
1. Project proposals must be consistent with and supportive of proponent’s mandate and thrust. Disgression or diversion from the institution’s mandate and thrust indicates that the project will have a problem of sustainability within the institution.
2. The project proposal has to match the objective, mandate and thrust of the potential donor. Donors have the account for their project support funds to their own board. Disgressions from mandate and approved priorities are severely sanctioned because they constitute technical malversation.
3. Donors provide assistance to potential recipients who have the capability to absorb and use resources wisely. This capability is in terms of trained manpower and experience. 85
4. Project proponents must show that they are putting in equity too much requested support. This equity includes effective time of implementors, operational funds, equipment and fixed assets.
5. Project proposals that duplicate existing efforts are perceived to have low project yield and negative political implications.
Read the following samples carefully and try to conceptualize what program or project you may want to prepare.
Have a nice day!
Prior to the study of given sample for programs or projects, summarily, take note of the brief outline of the different components of a typical program.
Major Parts of the Proposed Program
1. Program/Project Summary 1.) General Objective 2.) General Thrusts 3.) Linkages 4.) Outputs 5.) Organization and Management 6.) Implications for Development 7.) Legal Bases 8.) Financial Requirement
2. Rationale Statements 1.) Needs 2.) Justifications 3.) Objectives 4.) Special Features 5.) Implementation and Development 6.) Organization and Linkages
3. Program/Project Structure
4. Major Assumptions 1.) Clientele a.) Types b.) Qualifications c.) Desired number d.) Screening process
2.) Resident/Resource Staff a.) Total staff requirement b.) Field specialization and title of position c.) Screening process d.) Staff development program e.) Salary range requirement f.) Policy statements on staff management 86
3.) Equipment a.) Major equipment b.) Smaller equipment
4.) Library Needs / Other Needs
5.) Physical Plant and Site Development a.) Description of the plant and major components b.) Desired design and materials c.) Location d.) Activities or fall back if plant will not be completed on time e.) Cost per square meter and total floor space requirements
5. Evaluation and Monitoring
6. Budget Requirements
It is good to have this outline in mind so that as you read the samples you know what part you are reading. 87
This is a sample of a government program prepared for its long-term development plan.
COOPERATIVE DEVELOPMENT PROGRAM
The spirit of cooperation is not new masses. When Sandiko Bill was in our communities. Customs and presented in 1907, Prautel supported it traditions show that the people, especially with his articles appearing in various in the rural areas, work together for the newspapers in Manila. Later on, in 1916 attainment of common objectives. when the rural credit section of the Bayanihan or self-help still pervades in Bureau of Agriculture was organized, he our culture. In the provinces, not a few became the chief. Prautel has been help each other in agricultural and social credited as the organizer of rural credit activities. societies in the Philippines. The first attempt in cooperative The first rural credit cooperative society in the Philippines was in 1907 association in the country was organized when Governor Sandiko of Bulacan in Cabanatuan, Nueva Ecija on October drafted a bill for the creation of a 19, 1916. The progress of the movement Raiffeisen-type credit union. Its main was quite rapid. By December 1926, there objective was to promote the agricultural were rural credit cooperatives in 42 interest of the country. The Sandiko rural provinces, numbering 541. In 1939, there Cooperative Bill had been approved by were 570 agricultural credit cooperatives the Philippine Legislature but rejected by in actual operation with 105,084 members the Philippine Commission. In view of the and P3,376,411 circulating capital. pioneering efforts of the governor, he has been called the “Father of cooperative The Raiffeisen-Type Credit Union credit movement in the Philippines.” In Allen R. Huber founded the first 1915, a rural credit law was approved credit union of the Raiffeisen-type in the through the initiative of Rep. Corpuz, and Philippines at Vigan, Ilocos Sur in August, sponsored by Palma and Singson. 1938. He first came in the country in However, the law had remained 1926. He was disturbed to find the inoperative for one year, until it was masses, underprivileged and in debt subsequently amended placing on the bondage to money lenders. For five years Director of the Bureau of Agriculture the he sought in vain for a solution to the responsibility of expediting the problem. In 1931, he returned to the organization of rural credit associations in United States to study at the University of the entire country. Chicago. From there he went to Frankfurt, Indiana to serve a s a pastor of the First Rural Credit Cooperatives Christian Church. He discovered that In the early course of the hundreds of the members of the cooperative movement in the country, congregation had been under chattel Prautel was very instrumental. He arrived mortgage. The pastor had discussed with in 1898 after his active involvement for them their problems, and consequently, many years in rural credit movement in they put up a credit union, the first India. he had traveled far and wide, and Protestant Church credit union in he realized the credit needs of the America. 88
When Huber returned to the The history of agricultural credit Philippines in 1937, he conferred with D. cooperatives in the country shows their Howe, a technical adviser on early achievements, rapid rise and fall. In cooperatives. Based on the observations spite of attempts by the government to of Howe, he claimed that our cooperative save them, still many cooperatives failed. movement remained only in theory. He The ningas cogon attitude has persisted impressed upon Huber the importance of in many of our new endeavors. Some of training at least 50 Filipinos to become the reasons for failures of cooperatives in cooperative specialists. Such force would the past were: be responsible in spreading the 1. Lack of adequate character and cooperative program throughout the moral responsibility of country. Soon afterwards, the first credit management. union was organized in Vigan, followed by 2. Inefficient management due to other 30 credit unions until 1941 with lack of basic understanding of the some 2,000 members. Before the war, the basic principles of cooperation. most remarkable growth of a credit union 3. Borrowing money under false grew within two years into 590 members pretenses. with P22,000 capital and P38,000 loans. It 4. Defective securities. contributed much to the welfare of its 5. Heavy political interference with members. The credit union helped them in respect to collection of overdue burial expenses, education of their loans. families, construction of their houses, 6. Lack of adequate safeguards purchase of rice lands, medical needs and against underprincipled officers other essential needs. The members who granted loans to themselves relied on their own resources and none and their families and friends. from the government. During the war, said 7. Too much government financial credit union loaned out funds to the assistance in proportion to the resistance movement in their region for money of the association. the foods of the soldiers. 8. Lack of democratic procedure in the election of officers, particularly Performance of Past Cooperatives the treasurer. After the war, new interest in the 9. Inadequate supervision. credit union movement was stimulated by Santiago Manongdo, a government Cooperatives Development Program cooperative specialist. His enthusiasm under the Marcos Regime was aroused by foreign associates, such A vast majority o f the people in the as Huber and Kagawa who were both Philippines live and work in the rural cooperative leaders. Several years later, areas. It is in this particular sector where many cooperatives were organized, greater social and economic inequalities mostly farmers marketing cooperatives. pervade. This situation is not only true in Unfortunately, many did not become our country but also in all other poor and successful. Only very few survived and developing nations. It would be difficult for really turned out to be progressive. One of an industrialization program to succeed if the most spectacular achievements in it stands on a weak rural base. To correct Philippine cooperative movement is the the imbalance between the urban rural case of san Dionisio Credit Cooperative in conditions, government programs have San Dionision, Parañaque. It was founded shifted their emphasis towards rural in 1961 and it is now reputed to be the development. Rural electrification, biggest credit union in Southeast Asia. agrarian reform, family planning, students of cooperatives all over the world agricultural development, feeder roads, have been visiting the credit union in San irrigation systems, agro-business Dionisio to study its programs. industries and cooperatives have been given top priority by the New Society. Why cooperatives failed in the past However, all these program require coordination, cooperation and integration 89 in order to achieve a common goal: social To correct the shortcomings of the and economic development of the past cooperative program, it has been country. Cooperatives have been proven rationalized to meet effectively the to be effective in promoting such objective requirements of social and economic as experienced in Europe, United States, development. Decree No. 175 on April 14, Israel, Japan and Taiwan. 1973 entitled, “Strengthening the Cooperative Movement.” Henceforth, all Ex-President Ferdinand Marcos types of cooperatives were under the declared that it was the policy of the supervision and administration of the government to foster the organization and Ministry of Local Governments and growth of cooperatives to serve as tools of Community Development through the increasing the income and purchasing Bureau of Cooperatives Development. power of the poor, and of attaining a more However, since 1980 the Bureau of equitable distribution of wealth and Cooperatives Development has been income in our country. There is a big gap placed under the Department of between the rich and the poor. The few Agriculture and Food. Before, agricultural rich own many of the wealth while the cooperatives were under the many poor have only a few of the wealth. administration of the Agricultural Credit The Department of Agriculture and Administration while the non-agricultural Food through the Bureau of Cooperatives ones were under the Cooperative Development administered the Administration Office. Knowing the cooperative development program. The limitations of the previous cooperatives latter evolved the following basic development program and the reasons for premises: the failures of past cooperatives, Department introduced a systematic 1. Cooperatives facilitate the development process in the organization redistribution of wealth and and management of cooperatives. The income, and, therefore, be given process involves four stages which starts special consideration by the from a preparatory stage from the bottom, government. to a well-integrated cooperative system 2. Cooperatives are means for rural with horizontal and vertical linkages. and urban development. 3. Cooperatives development must Samahang Nayon – Stage 1 be systematic and system oriented. Samahang Nayon is a body corporate which is composed primarily of Stages of Development small farmers residing and/or farming within the geographical limits of the barrio The cooperative program under the for the purpose of improving the quality of old society had several shortcomings, life of the people. It is a pre-cooperative such as: organization based on and operated 1. Self-reliance was neglected. according to cooperative principles. Its 2. Absence of systematic linkages principal objectives are to increase the among the various types of income of the farmers, and to improve the cooperatives. social and cultural aspects of barrio life. 3. Training, education, discipline and savings programs were not Social and economic conditions in adequate. the rural areas leave much to be desired. 4. Many cooperatives were hastily Since the rural sector constitutes the organized as a result of crash foundation of our economy and nation, it programs of the government. would be only proper and wise to start the 5. Promotion, organization and cooperatives development program from administration of the cooperative the barrio level. For any significant socio- program by the government were economic development plan, if it is unsystematic and inefficient. intended to benefit more people, must be barrio-based and mass-oriented. As President Marcos said, the less fortunate 90 segments of our society who are in need A Samahang Nayon, although not of social and economic amelioration yet cooperative, performs simple business should have the right to enjoy the privilege activities. The members buy their of self-development, social growth and production supplies on a wholesale basis, economic independence under a truly just and then sell their products collectively. and democratic society. Thus, in both instances, the middleman who gets the biggest profit is eliminated. Operation of Samahang Nayon Furthermore, the process of buying and selling provides the farmers an Since the Samahang Nayon serves experience in business and cooperative as the foundation of the whole efforts. Another function of the Samahang cooperatives development program, Nayon is to coordinate and facilitate extensive and rigid trainings, and other government services and programs, such requirements, such as discipline and as family planning, land reform, savings have been imposed by the agricultural programs and the like. The Bureau of Cooperatives Development. foregoing functions serve as a training for This is to ensure a very strong foundation the members of Samahang Nayon in of the program. With emphasis on planning, organization, decision making education and training, a total of 65 weeks and other management skills. of seminars and trainings are given to members of Samahang Nayon. Subject Disciplinary Measures areas are: Discipline is an effective policy of 1. Agrarian reform program; management as long as it is fair. 2. Cooperatives development Otherwise, it leads to misunderstanding program; and bitterness. The goals of an 3. Agricultural skills; organization are more likely to be realized 4. Products specialization; and if the members and officers are 5. Management skills. responsible. In the Samahang Nayon, delinquent members are either suspended Capital Formation or expelled depending upon the nature Funds are very important in any and degree of their violations of the organization. The members of the policies of the association, such as: Samahang Nayon build their own capital 1. Failure to pay membership fees, through their savings program which is dues and contributions. composed of Barrio Guarantee Fund and 2. Failure to comply with the terms Barrio Savings Fund. These funds are and conditions of the membership intended for the following purposes: agreement. 1. To guarantee the payment of land 3. Acts or omissions which are amortization of members under prejudicial to Samahang Nayon. the land reform program. 2. To capitalize the organization of Likewise, the operations of the full-fledged cooperatives, such as Samahang Nayon may be suspended or credit cooperatives, producers its registration cancelled by the Ministry cooperatives and consumers on the following conditions: cooperatives. 3. To purchase shares of stocks of 1. Such Samahang Nayon fails to and/or to capitalize rural banks function within a period of six and development banks. months from the date of 4. To be used for other purposes as registration. may be authorized by the 2. The percentage of amortizing Department of Agriculture and owners in default in such Sama- Food. hang Nayon exceeds 20 per cent. 3. Such Samahang Nayon fails to Simple Economic Functions exercise any of its powers or discharge any of its duties and 91
responsibilities under the member- terms of costs, funds, management, ship agreement. specialization and division of work. This 4. Such Samahang Nayon violates maximizes the social and economic any rules or regulations benefits to the members, and improves promulgated by the Ministry the performance of cooperatives in a through the Bureau. highly competitive market.
Kilusang Bayan – Stage II Union of Kilusang Bayan – Stage IV As defined under P.D. 175, Kilu- This involves the organization and sang Bayan or full-fledged cooperatives development of federations and/or unions shall mean only organizations composed of Kilusang Bayan. There will be only one primarily of small producers and national union of Kilusang Bayan to which consumers who voluntarily join together to all types of cooperatives from the form business enterprises which they Kilusang Bayan may affiliate. At this themselves own, control and patronize. stage, all types of cooperatives at different Their purposes, among other things, are: levels are integrated to provide systematic horizontal and vertical linkages. Such 1. To encourage scientific production integration has been programmed to among its members. maximize benefits through cooperative 2. To provide goods, services and financing, production, marketing and other needs to the members. consumption. The combination of 3. To encourage thrift among its resources and functions of all types of members. cooperatives greatly contributes to the 4. To build houses or to acquire lands growth and success of the cooperative for its members. development program of the country. This 5. To promote educational, social and strategy further generates economic economic conditions of its mem- activities which induce backward and bers. forward linkages. 6. To establish and operate cooperative rural banks, development banks, cooperative Other Institutional Support insurance, and cooperative The government, in its desire to wholesale and retail complexes. ensure the successful implementation of the cooperatives development program, Federation of Kilusang Bayan – has provided assistance in the form of Stage III funds, training, information, management Two or more Kilusang Bayan may and development councils: form a federation on the provincial, 1. Cooperative Development Loan regional and/or national levels. This stage Fund serves as (1) sources of involves the promotion, organization and loanable funds to cooperatives; (2) development of consumers cooperative guarantee for loans granted to complexes in the thickly populated areas. cooperatives; and (3) sources of They shall serve as ready markets for the advances to cooperatives for the produce of Samahang Nayon and other purchase of equity in rural banks. producers cooperatives. This fund shall be coursed through There is more unity and strength government and private financial when several cooperatives combine their institutions. resources. In a very competitive economy, 2. Regional Information and Training such as ours, federation of cooperatives is Centers which assist the program indispensable. In many instances, on promotion, information and cooperatives find difficulties in competing education through training courses, with big and well-established business radio programs and printed corpo-rations. However, if cooperatives materials. pool their resources, they develop more 3. Rural Development Councils which efficient internal economies of scale in are composed of local government 92
officials and community leaders regulate within its own ranks the participate in the planning and promotion and organization, training and implementation of rural research, audit and support services development programs. relating to cooperatives with government 4. Management and Training assistance where necessary. Assistance Program which is In the case of the creation of the composed of competent Cooperative Development Authority, it has cooperative managers are assigned been declared that the State shall to manage cooperatives for the promote the viability and growth of purpose of training understudies Cooperatives as instruments of equity, who will eventually assume the social justice and economic development management of their cooperatives. and to create an agency, in fulfillment of the mandate in Section15, Article XII of Cooperative Development Program- the Constitution. Toward this end, the Aquino Regime State shall recognize cooperatives as associations organized for the economic The Bureau of Agricultural and social betterment of their members, Cooperative Development under the operating business enterprises based on Department of Agriculture was abolished mutual aid, and founded upon upon the approval of the Cooperative internationally accepted cooperative Code of the Philippines on March 10, principles and practices. 1990. The said Bureau has been replaced by the Cooperative Development In furtherance of this policy, the Authority. This is under the Office of the appropriate national economic planning President. It is headed by a Chairman and agency shall include the promotion of six administrators. growth and expansion of cooperatives as a major and indispensable component of Article 2 of the Cooperative Code national development plans. All states the declared policy of the State to departments, branches, subdivisions and foster the creation and growth of instrumentalities of the Government shall cooperatives as a practical vehicle for promote the formation of cooperatives promoting self-reliance and harnessing under their respective programs by people power towards the attainment of providing them with appropriate and economic development and social justice. suitable incentives. The State shall encourage the private sector to undertake the actual formation The State recognizes the and organization of cooperatives and shall cooperative sector as primarily create an atmosphere that is conducive to responsible for the institutional the growth and development of these development of cooperatives. cooperatives. Accordingly, the State recognizes the rights of the cooperative sector to initiate Toward this end, the Government and foster within its own ranks and all its branches, subdivisions, cooperative promotion, organization, instrumentalities and agencies shall training, information gathering, audit and ensure the provision of technical support services, with government guidance, financial assistance and other assistance where necessary. services to enable said cooperatives to develop into viable and responsive Government assistance to economic enterprises and thereby bring cooperatives shall be free from any out a strong cooperative movement that is restrictions and conditionality that may in free from any condition that might infringe any manner infringe upon the objectives upon the autonomy or organizational and character of cooperatives as provided integrity of cooperatives. in this Act. The State shall, except as provided in this Act, maintain the policy of Further, the State recognizes the noninterference in the management and principle of subsidiarity under which the operation of cooperatives. cooperative sector will initiate and 93
Program Evaluation are responsible in the implementation of the program. The interaction of the Many cooperatives in the past were aforementioned factors determines the organized without proper and adequate success of the program. trainings and discipline. Others were hurriedly put up in compliance with the Strong cooperative development crash programs of the government. Not a foundation few cooperatives were established simply to take advantage of the promised Our cooperative program appears assistance from the government. Such to stand on a very solid base. A strong situations only served to undermine the foundation is vital in the stability of any spirit of self-reliance of the people. It only organization. Considering the rigid and firmed up to the people’s dependence on extensive preparations in the Samahang the government. As a result, they failed to Nayon, which is the foundation of the realize the fact that more lasting benefits cooperative development program., the could be developed through their own possibility of failure is not expected to plans and efforts. occur. Samahang Nayons which are inefficient can not become full-fledged Crash programs are not effective cooperatives or Kilusang Bayans. tools of change. it was used before in the Therefore, only well-developed and desire of the government to accelerate the trained individuals should constitute the slow pace of the cooperative program. membership in the cooperatives. With The results were meaningless and these highly qualified human resources temporary. Fundamental principles in with proper attitudes, values, knowledge organization and management were and skills, the success of the cooperatives disregarded in exchange of faster and development program seems to be more results. As a rule, plans and attainable. decisions must come from those who are directly involved in the program. Interest Introducing the cooperative must be stimulated within the development program of the New Society organization. Field workers during the old is introducing change. Sociologists claim society had no choice. They had to fill up that the process of change is a slow the quota which was imposed from above. process. It was a standard joke in the past that government fieldmen should not An excellent plan and program make it slower. Attitudes and values must conform with the requirements of change. Learning a good lesson from the Moreover, institutional arrangements must past, our new cooperative development be restructured to create a favorable program has been designed to eliminate environment in order to sustain the growth the shortcomings of the old cooperative of change. it is to be hoped that the programs, and to assume a more cooperative development leaders will not meaningful role in social and economic fail in their noble endeavor. They deserve development. The new cooperative the people’s support and cooperation. development program has evolved a more systematic and bigger plan, embodying PROBLEMS AND PROSPECTS the features of good organization and management. The blueprint is The history of cooperation prior to comprehensive and well-integrated which the time of the Rochdale Pioneers can be classified as one of the best suffered from many weaknesses and cooperative development programs. failures. Except perhaps some primitive societies all over the world which However, the problem of practiced group cooperation to protect transforming an excellent program into themselves from natural dangers and to reality lies in actual implementation and secure their basic physiological needs. the subsequent viability of the project. There are many different variables which Nonetheless, the failure of past should be taken into consideration, such cooperatives were not in vain. The as attitudes of the people and those who Rochdale Pioneers learned their lessons 94 well from such mistakes. Thus, they were Filipino cultural values like mañana habit, able to establish the framework of a real ningas cogon, bahala na, etc. constitute a cooperative movement. They created the hindrance to the promotion of principles of cooperation for all others to cooperatives. follow and spread its ideals and benefits. The concept of cooperative is a Many communities in Europe, United form of change in people. When a person States, Canada, Japan and other becomes a member of a cooperative, he countries have greatly improved their undergoes a continuing process of social and economic conditions through change in attitudes and values. He begins their various cooperative societies. to think of and work for group interests. He has to reform his uneconomical habits. Institutional Barriers Moreover, he learns to involve himself in More than a decade ago, Gunnar the problems of his community and join Myrdal, a famous economist, conducted a others in achieving the goals for the field research on the conditions pervading welfare of all. in Asia, especially South Asia. These One fundamental experience in observations were recorded in his sociology is that it is not easy to change monumental book, ASIAN DRAMA: An people. It requires a slow and long Inquiry into the Poverty of Nations, process of training and education. published in 1968. He found out, among Precisely, this is the main reason why other things, that cooperatives were people are slow to practice the program of introduced by the governments of South cooperatives. By nature, people resist Asia and other Asian countries as a change if it involves radical reforms in program to improve agriculture and the their ways of life. More so if the changes economic life of the farmers. impose inconveniences and sacrifices on Unfortunately, these cooperative their part. Some government programs in programs had very superficial impact on the past were introduced with the use of the welfare of the poor farmers, especially pressure or material and financial the tenants and the sharecroppers. In rewards. Under these conditions, many general, the concept and practice of people were stimulated to accept the cooperatives were not appreciated and government programs in a very short accepted by the farmers. In view of the period. However, such changes in the unequal social structure in the region, the people were not real and did not last. To benefits of cooperatives go to the some extent these programs only eroded landlords and other affluent members of the attitudes and values of people. society. Naturally, the millions of sharecroppers, particularly in India, have Records of Filipino Associations not been interested to participate in It has been a common knowledge cooperative organizations. According to that most cooperatives in the past failed Prof. Myrdal there should be a radical because the officers mismanaged the land reform program to attain social funds of the organization. Not a few equality. Such restructuring of society treasurers and presidents of the creates a favorable environment for the associations absconded with the acceptance and growth of government contributions of the members. These graft reform programs, like cooperatives. and corruption were not only true among other Filipino associations at present. As Negative Values and Attitudes usual it is only the officers who get the It is common among orientals that benefits. they do not mean what they say in their These are some of the more desire to please people. More often than important reasons why until now many are not, they do not like to say no. When they still reluctant to join cooperative are invited to attend a community organizations. In fact, it is not even easy meeting, they say yes. But they do not to organize a simple cooperative attend and instead make good excuses. organization like the credit cooperative in 95 colleges and universities. Compared to organizing cooperatives, like the San the Rochdale Pioneers, employees in said Dionisio leaders, the growth of institutions are in a better position to cooperatives will be faster. organize cooperatives, considering their resources. The Role of the Government It has been observed that the main In a poor and developing economy, problem is organization and management. the government assumes a more Who is going to sacrifice his time and aggressive role in developmental effort in initiating the organization of a programs. It lays the foundation of cooperative? Who is encouraged to development, such as education, roads, organize a cooperative when most of the bridges, hospitals, electricity and other prospective members are not even social investments. These integrated interested to attend the first meeting? components of investments usher in an Again, it is a matter of attitudes and atmosphere which is conducive not only values. We are not like the Rochdale for the growth of trade and commerce but Pioneers or the priests of St. Xavier also the programs of the government, University of Antigonish. such as agricultural production, cottage industries, community development, The people are not to be blamed on agrarian reform and cooperatives. their lukewarm reactions towards the cooperative organizations. They know the The promotion of cooperative value of cooperatives and its advantages. development is one of the major programs What they doubt, however, is the viability of the New Society. Cooperatives are not of the organization and the honesty of the only known for their effectiveness in officers. Their lack of trust and confidence improving the social and economic is without baseless reasons. As a matter conditions of the poor but also for their of fact, even under the New Society there useful role in developing human are still several associations whose funds resources and communities. Since the have been stolen by their officers. early 1900’s, there were attempts by the government to organize cooperatives. The Need for Honest and However, as stated earlier in this book, Competent Managers the cooperative program was not systematic and it violated principles of Management is considered as one organization and management. of the main factors of the success of a Consequently, the movement did not cooperative organization. The most accomplish many of its objectives. qualified are persons of honesty, integrity, Nevertheless, there were few cooperative competence and above-average organizations which became successful, intelligence. Evidently, this type of organized mostly by the priests, ministers individuals are highly paid and many and teachers. cooperatives can not afford them. While it is true that the Bureau of Cooperatives Prospects of the Cooperative Development subsidizes the management Development Program requirement of new cooperatives, it seems that this assistance has been A good program – well planned and directed more to cooperatives organized systematic – such as our cooperative by the farmers. development program does not invariably ensure success. There is still the problem In some communities, there are of implementation and management. In individuals from among the residents who the past, we had many excellent are good materials for management. But programs but they failed in the actual they have no time for such organizations. implementation. This lack of socially-oriented community leaders contribute to the slow movement It has been often said that a good of our cooperative program. Most likely if program is measured in terms of its social there are professionals in the community and economic contributions to the welfare who will sacrifice their time and labor in of the poor. If the benefits of the 96 cooperative program have not seeped The performance of the new down to the level of the masses then it is cooperative development program, in not considered a good program. There terms of the number of cooperatives are programs which improve only the which were organized is quite impressive. economic positions of the upper and the However, in evaluating the success of the middle classes of our society. These only program, it is the quality that counts. widen the gap between the rich and the Supposing after the financial and poor. Cooperatives are known for their management assistance of the social-equalizing effects for they are government has already expired, could effective instruments of redistributing these existing cooperatives still function income and wealth. The resources of the effectively? Another test of viability is the cooperative program of the government presence of dynamic leadership in the should therefore be directed towards this cooperative organization. Many objective. associations stop operating the moment their presidents or managers resign or The Social Philosophy of the leave. In the past, not a few active barrio San Dionisio Cooperative councils collapsed when the government community development worker or In the case of the San Dionisio extension officer left the community. This Credit Cooperatives, its leaders are more shows that such organizations lacked a concerned with the social implications of chain of leadership. their cooperative. They are after the development of human resources in order The prospect of ningas cogon or to attain their ultimate mission which is natural death for our newly existing community building. To them, the cooperatives which have been initiated by improved attitudes, values and skills they the government is not likely to happen in have imparted to the community are far view of the strict requirements of the more important than the millions of pesos government. As long as the practices of they have created since their operation in our cooperatives do not deviate from the 1961. cooperative development program of the New Society, the probability of success With the huge financial resources and growth of the cooperative movement of the San Dionisio Credit Cooperative, would be greater. Attitudes, values and they would earn more if these would be skills have to be improved to sustain the invested in more lucrative investment viability of cooperative organizations. ventures. Thus, the members of the Hence, training and education of the cooperative would get more dividends or officers and members should not be taken interests for their money, and they would lightly. be economically benefited. The leaders of the cooperative are aware of such The Economics of Cooperatives financial prospects which would considerably promote the economic well- The economic contributions of being of the members. But they have cooperatives to the welfare of the poor are resisted the temptation of making more many and varied. These are adequately profits for their cooperative. According to proven by all successful cooperatives, them, this better business alternative such as the Rochdale Society and the defeats the very essence of a credit San Dionisio Credit Cooperative. People cooperative. They claimed that they would were able to build their houses, send their only bolster the forces of capitalism which children to schools and acquire their other is profit-oriented and competitive. Such essential needs through their values of the leaders of San Dionisio cooperatives. Without such organizations, Credit Cooperative are very rare in an age they are at the mercy of loan sharks and of materialism and individualism. most probably, they have remained in perpetual debt bondage. And there is little The Quality not Quantity of hope for them to improve their economic Cooperatives Organized conditions. Thus, the vicious cycle of poverty clings to their wretched lives. 97
their farm products. And for the security of If there would be more successful the farmers and their families, they can cooperatives in our communities, like that depend on their cooperative insurance. of San Dionisio and other few The whole cooperative system with communities in our country, more people its vertical and horizontal linkages offers would have enjoyed the economic considerable economic opportunities to advantages of cooperatives. When people people who like to join cooperative. It is get more income through the help of their open to all consumers and small cooperatives, this increases their producers. It is a business organization purchasing power. This means people for the poor and it is service-oriented. buy more and this favorably affects all With all its integrated economic benefits sectors of the economy. For instance, and proper guidance from the they will buy more of their basic needs, government, the cooperative development such as food, clothing and shelter. The program has a promising future. producers and suppliers of these goods will make more sales and income. People Success of the Program Depends will also demand for more and better on the People services, such as education, health, recreation, etc. Likewise, the service The success of the cooperative industry will get more income. Producers development program ultimately hinges and businessmen will be stimulated to on the people. The nature and quality of invest more because of the increasing their attitudes, values and institutions are demand for goods and services. the essential determinants of the future of Consequently, there will be more our cooperative movement. Therefore, production, employment, income, savings these variables of development should be and consumption. These multiplier and improved to achieve the goals of the accelerator effects of cooperatives do not cooperative program. Regressive values only improve the standard of living of the and institutions should be changed with members of the cooperatives but also the better ones in order to create an whole community, and contribute to the environment which is favorable for the gross national product of the whole growth of cooperatives in our country. economy. These have been the Perhaps, it may not be possible to attain a experiences of many communities in real successful cooperative program Europe, United States, Japan, Canada throughout the country in the next few and other nations with progressive years. Changing values and institutions cooperative organizations. usually takes a longer time. But what is important is that we have started with a Economic Benefits for the Farmers good program. As the saying goes: The journey of a thousand miles begins with a In our case, members of the single step. For sure, we have Samahang Nayon buy their agricultural accomplished the first step. Along the trail inputs on wholesale basis. They market of the long journey of the cooperative their produce collectively. In both movement in our country, there are many transactions, they enjoy economic obstacles and problems to hurdle and benefits. By eliminating the functions and solve. These are the difficulties and profits of the middlemen, they reduce their challenges of the cooperative cost of production and obtain higher development program. prices for the farm products. This marketing activity is just one of the several economic gains which the farmers acquire through their cooperative associations. They have their cooperative rural banks to help them in their credit and other financial problems. Their own area marketing cooperatives take care of their marketing problems. Consumers cooperatives in the urban centers buy 98
Another sample of a government program.
AGRARIAN REFORM PROGRAM
The Agrarian Reform Program The program is a package of services extended to the farmers in the form of 1. What is the agrarian reform program? credit support, infrastructure, farm Answer: It is a program designed to extension, legal assistance, uplift the farmers from poverty, electrification, and the development ignorance, and stagnation and to of rural institutions. make the useful, dignified, Its five major components are: responsible, and progressive partners in nation-building. a. Land tenure improvement; 99
b. Institutional development; h. To involve local governments in c. Physical development; the implementation of the d. Agricultural development; and agrarian reform program; and e. Human resources development. i. To evolve a system of land use and classification. 2. What lands are affected by the agrarian reform program of the 4. What are the two provisions of the Philippines? New Constitution on which the agrarian reform program is Answer: The program covers two anchored? kinds of lands: tenanted areas or private agricultural lands; and the a. Article II, Section 6: alienable and disposable public The State shall promote lands. social justice to ensure the dignity, welfare, and security of 3. What are the objectives of the all the people. Toward this end, agrarian reform program? the State shall regulate the Answer: acquisition, ownership, use, enjoyment, and disposition of a. To establish owner cultivatorship private property, and equitably among those who live and work diffuse property ownership and on the land as tillers, with owner profits. cultivatorship and the economic family-size farm as the basis of b. Article XIV, Section 12: Philippine agriculture and, as a The State shall formulate consequence, to divert landlord and implement an agrarian capital in agriculture to industrial reform program aimed at development; emancipating the tenant from the b. To achieve a dignified existence bondage of the soil and achieving for the small farmers free from the goals enunciated in this pernicious institutional restraints Constitution. and practices; c. To create a truly viable, social 5. What is the law governing the and economic structure in implementation of the agrarian reform agriculture conducive to greater program of the Philippines? productivity and higher farm Answer: The Code of Agrarian income through a cooperative Reforms of the Philippines. system of production, pro- cessing, marketing, distribution, 6. What is the Code of Agrarian credit and service; Reforms of the Philippines? d. To apply all labor laws equally Answer: It is Republic Act Number and without discrimination to both 3844 (enacted August 6, 1963) as industrial and agricultural wage amended by Republic Acts 6389 and earners; 6390 (both enacted September 10, e. To provide a more vigorous and 1971) and as amended by systematic land resettlement Presidential Decree Numbers 2 and program and public land 27 (as amended by PD Nos. 57, 84, distribution; 85, 152, 175, 251, 266, 315, 316, f. To make small farmers more 583, 584, 772, 815, 816, 1038, 1040, independent, self-reliant, and and 1066). responsible citizens, and a source of genuine strength in our a. PD No. 2 proclaims the entire democratic society; country as land reform area; g. To give first priority to measures enjoins all government agencies for adequate and timely financing and offices to extend full of the agrarian reform program; cooperation and assistance to 100
the Ministry of Agrarian Reform in the implementation of the to ensure the successful supervised credit program prosecution of the agrarian (promulgated on November 19, reform program; 1972); b. PD No. 27 decrees the d. PD No. 84 authorizes and emancipation of tenants from the empowers the Minister of bondage of the soil transferring Agrarian Reform to sign and them the ownership of the land issue the Certificate of Land they till and providing the Transfer pursuant to PD No. 27 instruments and mechanisms (promulgated on December 22, therefore; provides that a tenant- 1972); farmer, whether in land classified e. PD No. 85 creates a special fund as landed estate or not, shall be to meet the financing deemed owner of a portion requirements of the agrarian constituting a family size farm of reform program as provided in five hectares if not irrigated and PD No. 27 and for other three hectares if irrigated. It purposes (promulgated on provides that the landowner may December 24, 1972); retain an area of not more than f. PD No. 52 prohibits the seven hectares if such landowner employment or use of share is cultivating such area or will tenants in complying with now cultivate it; formulates land requirements of law regarding valuation as equivalent to two entry, occupation, improvement, and one-half times the average and cultivation of public lands harvest of three normal crop amending for the purpose certain years immediately preceding provisions of Commonwealth Act October 21, 1972; enjoins the No. 141, as the Public Land Act amortization of the total cost of (promulgated on March 31, the land including interest rate of 1973); six per cent annually to be paid g. PD No. 175 strengthens the by the tenant in fifteen tears of cooperative movement as a fifteen equal annual means of increasing income and amortizations. It orders the purchasing power of the low- membership of the tenant on a income sector of the population duly recognized farmer’s in order to attain a more cooperative as one prerequisite equitable distribution of income before the title to the land is and wealth and enjoy on a lasting issued to the tenant-farmer; and basis the benefits of agrarian further it provides that the land reform; lays down the acquired is not transferable cooperative principles of open except by hereditary succession membership to all persons who (promulgated October 21, 1972); can make use of its services and c. PD No. 57 exempts the are willing to accept the landowners from the capital gains responsibilities of membership, tax on the proceeds of the democratic control irrespective of amortization paid him by the the number of shares owned tenant-purchaser and likewise, where each member can cast from income tax due on the only one vote in deciding upon accruing interests paid as an the affairs of the cooperative, addition to the total cost of the limited interest to capital with the land; requires rural banks maximum rate of interests earned including the Agricultural to be established by the Ministry Guarantee Fund constituted of Local Government and under section twelve of R.A. No. Community Development, and 6390 and other financial patronage fund where the net institutions to actively participate income after the interests on 101
capital has been paid shall be the modes of payment pursuant redistributed among the to Section 80 as amended and members in proportion to their the uses of bonds pursuant to patronage; qualifies the powers Section 84 as amended of the of the cooperatives whereby it General Banking Act; and defines can exercise the same rights and other provisions related to the privileges given to persons, organization and operations of partnerships, and corporations the Land Bank of the Philippines provided under existing laws; (promulgated on July 21, 1973); defines the privileges under i. PD No. 266 provides for the certain provisions, preferential mechanics of registration of right to supply agricultural ownership or title to land under commodities produced by PD No. 27 (promulgated on members of the cooperative to August 4, 1973); State Agencies administering j. PD No. 315 provides that Land price stabilization programs, and Transfer Certificates issued the exemption from the pursuant to PD No. 27 shall be application of the Minimum Wage accepted by financing institutions Law upon the recommendation of as collateral for loans in the the Bureau of Cooperatives amount not less than sixty per Development subject to the cent of the value of the approval of the Minister of Labor; farmholding as determined under creates the Cooperative PD No. 27 with the loan to be Development Loan Fund to used solely in the improvement financially assist cooperatives; or development of his and enjoins the Agrarian Reform farmholding or the establishment Fund Commission, Greater of facilities that will enhance Manila Terminal Food Market, production or market of National Development Company agricultural products or and facilities for storage, increasing farm income processing and food markets to (promulgated on October 22, be leased or sold to cooperatives 1973); (promulgated on April 14, 1973); k. PD No. 316 prohibits the h. PD No. 251 establishes the Land ejectment of tenant-tillers from Bank of the Philippines to provide their farmholdings until the adequate financial support on all respective rights of the tenant- phases of the agrarian reform farmer and the landowner shall program; defines the power of have been determined in the bank in general as mentioned accordance with the rules and in the Corporation Law and the regulations implementing PD 27; General Banking Act, as and prohibits any judge of the amended; defines the conditions Court of Agrarian Relations, for the issuance of bonds Court of First Instance, municipal pursuant to Section 76 as or city court or any other tribunal amended and the issuance of or fiscal to take cognizance of preferred shares of stocks to any ejectment case or any other finance acquisition of farm lots case designed to harass or and other assets pursuant to remove a tenant of an agricultural Section 77 as amended of the land primarily devoted to rice or General Banking Act; forms a corn (promulgated on October Special Guaranty Fund which 22, 1973); would be used to pay the bonds, l. PD No. 583 prescribes penalties debentures, and other obligations for the unlawful ejectment issued by the Land Bank in exclusion, removal or ouster of Section 78 as amended of the tenant-farmers from their General Banking Act; qualifies farmholding, penalizes any judge 102
of the Court of Agrarian crop as a means to avoid the Relations, Court of First Instance, application of the land reform city or municipal court or any laws or decrees to his fiscal or other investigating officer landholdings or who employs any including members of the Armed other act scheme or strategy Forces of the Philippines who resulting in ejectment, exclusion, shall take cognizance of cases of removal, ouster or dispossession or shall order the ejectment, of the tenant-farmer with, upon ouster, exclusion, or removal of conviction, prison mayor or a fine any tenant-farmer from the land ranging from P5,000 to P10,000 titled by him with, upon or both (promulgated on October conviction, prison mayor and 21, 1975); perpetual absolute p. PD No. 816 penalizes any disqualification; penalizes any agricultural lessee of a rice or official or employee of the corn land under PD No. 27 who government including members deliberately refuses or continues of the Armed Forces of the to refuse to pay the rentals or Philippines who executes an amortization payment when they order for the ouster, removal are due and remain unpaid within exclusion or ejectment of a a period of two years. Upon tenant-farmer with upon conviction, forfeiture of the conviction, prison correctional Certificate of Land Transfer and perpetual absolute issued to him; or if his disqualification; and penalizes landholding is not yet covered by any landowner who converts his Operation Land Transfer, tenanted land primarily devoted forfeiture of his right to be issued to rice and corn into any non- a Certificate of Land Transfer. PD agricultural use or to the No. 816 vests the Court of production of any other crop as a Agrarian Relations with means to avoid the application of jurisdiction over such cases of the land reform or decrees to his refusal or continued refusal to landholdings and to dispossess pay rent (promulgated on his tenant-farmers of the land October 21, 1975); tilled by him with, upon q. PD No. 1038 strengthens the conviction, prison mayor or a fine security of tenure of tenant-tillers ranging from P5,000 to P10,000 in non-rice and corn private or both (promulgated on agricultural lands producing November 16, 1974); crops including but not limited to m. PD No. 584 establishes a abaca, banana, coconut, coffee, procedure for small farmers to mango, durian and other acquire equity in rural banks permanent trees; prohibits any (Promulgated on November 16, judge of the Court of Agrarian 1974); Relations, Court of First Instance, n. PD No. 772 penalizes squatting city or municipal court or any and other similar acts other tribunal or fiscal to take (promulgated on August 20, cognizance of any ejectment 1975); case or any other case designed o. PD No. 815 amending Section 4 to harass or remove a tenant of of PD No. 583 penalizes any an agricultural land primarily landowner, landholder, devoted to rice and corn unless agricultural lessor or anybody certified by the Minister of acting for and in their behalf, who Agrarian Reform as a proper converts his tenanted land case for trial; imposes a penalty primarily devoted to rice and corn of arresto mayor or a fine of into any non-agricultural use or P1,000 or both upon any judge or into the production of any other fiscal or other hearing officer who 103
shall take cognizance of any arrangement land commodity produced, case designed to exclude, oust, all public and private agricultural lands as eject or remove any tenant-tiller provided in Proclamation No. 131 and or who shall order the ejectment, Executive Order No. 229, including other ouster, exclusion, or removal of lands of the public domain suitable for the tenant-tiller on the land tilled agriculture. by him without first complying More specifically, the following lands with Sec. 2 of PD 1038; imposes are covered by the Comprehensive a penalty of arresto mayor or a Agrarian Reform Program: fine of P1,000 upon any officer or employee of the government, (a) All alienable and disposable lands including members of the Armed of public domain devoted to or suitable for Forces of the Philippines who agriculture. No reclassification of forest or executes an order or upon any mineral lands to agricultural lands shall be landowner, landholder, undertaken after the approval of this Act agricultural lessor or anybody until Congress, taking into account acting for and in their behalf who, ecological, developmental and equity by any act scheme or strategy considerations, shall have determined by shall eject, exclude, oust or law, the specific limits of the public remove the tenant-tiller from his domain; farmholding (promulgated on (b) All lands of the public domain in October 21, 1976); excess of the specific limits as determined r. PD No. 1040 prohibits the by Congress in the preceding paragraph; contracting of share tenancy in all agricultural lands covered by PD (c) All other lands owned by the No. 27 (promulgated on October Government devoted to or suitable for 21, 1976); and agriculture; and s. PD No. 1066 exempts from land (d) All private lands devoted to or reform all tenanted sugar lands suitable for agriculture regardless of the converted from sugarcane agricultural products raised or that can be production to production of raised thereon. priority crops such as rice, corn, feedgrains, cotton, fruits, and SECTION 5. Schedule of vegetables, and livestock Implementation. – The distribution of all (promulgated on December 31, lands covered by this Act shall be 1976). implemented immediately and completed within ten (20) years from the effectivity SECTION 4. Scope. – The thereof. Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial
Evaluation
SAQ 8
Conceptualize and prepare a program. The program’s scope could be local, regional or national. 104