Are cooperatives ready to merge or consolidate?

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Locally, the number of COVID-19 related cases gradually climb. People experience mixed feelings as to the factors that contributed to the rise in the number of infected individuals. Some business establishments had ceased operations while others decided to reduce manpower resulting in retrenchment of some employees. The scenario is different from that of the alleged case stating that about 11,000 employees had been affected—a painful decision that top management will bear until the situation is resolved.

In our previous column we had proposed that cooperatives need to be prepared, have concrete plans and strategies. This is on the assumption that even if the government will relax the status of quarantine in the country, lifestyle and environment can never be the same again—the reason they call it new normal.

If businesses like transnational, international, or local had been affected by the pandemic then similarly the different cooperatives experienced the same wrath brought by this crisis. Everybody was surprised as no one was prepared for this disaster that affected almost every corner of the globe.

As people’s organization, cooperatives had been considered as resilient. True, cooperatives managed to surpass several calamities including the global financial crisis but the current dilemma touched the very essence of our existence—life. If I may add, many fellow Christians claimed to have accepted Jesus Christ yet no one is rushing to leave earth and go to heaven. A reality that everybody would like to enjoy life on earth as it is the precious gift of God to mankind.

Reflecting on the implications of the pandemic especially in our countryside, the challenges on survival of micro, small and medium enterprises including cooperatives pose a great challenge to development workers.

As change agents, how can we help these entities hurdle the challenges especially that sources of livelihood of members are severely affected and the movement from one place to another is restricted? The fear of being infected coupled with the state and local government protocols that influence how people should behave brings anxiety to the max.

Some of the possible effects of the pandemic to cooperatives could be the reduction in the volume of business transactions, regulated movements of people and products affecting the flow of commodities from production areas to market outlets, decrease in capital, reduced quantity of products and the corresponding decrease in revenues associated with the intervening factors.

If the situation worsens, the capacity of SMEs to sustain operations could be affected. The effect on capital, resources and technology entails a strategy that can help enhance competitiveness and sustainability. I guess harnessing the provisions of the Cooperative Code can possibly help build stronger cooperatives. Articles 21 and 22 of RA 9520 introduce the concept of merger and consolidation of cooperatives. Rule V of the Implementing Rules and Regulations of RA 9520 provides the guidelines. I shall continue to share some insights in our next issue awaiting government directives on mass gathering and conduct of group activities.