The AgriCOOPh Coops4food program was introduced in 2020. This is an initiative that links producers’ cooperatives to consumers’ cooperatives, organizations, and community associations. The Coops4food model is a community-supported, market-driven strategy that generates interest and unlocks the potential of non-traditional markets as procurement organizations of fresh farm products to match the demand of their members and constituents. This business model helps to develop a food system that increases the intake of fresh fruits, vegetables, and organic rice in the Filipino diet rather than one that relies more on processed food from supermarkets.
In 2021, the Coops4food program expanded with the participation of AgriCOOPh through its Sales and Marketing Service (SMS) unit and member cooperatives in the supplementary feeding program of the DSWD-7. This is under the Enhanced Partnership Against Hunger and Poverty (EPAHP), a program that aims to help mitigate hunger, ensure food and nutrition security, and reduce poverty in urban and rural communities, including marginalized communities.
AgriCOOPh’s participation in the Public Food Procurement Program (PFPP) is through competitive bidding and negotiated “request for quotations” (RFQs).
Figure 1. Coop-to-Coop Cooperation Business Model
Table 1. Commodities Traded
| Commodity | Traded Value (Php) | Participants | ||
| 2021 (Jan-Dec) | 2022 (Jan- Sept) | Buyer | Supplier | |
| Rice | 10M | 70M | DSWD- 7 ,PUBAC, PAGTAMBAYAYONG, OVP | SNMPC, GCMPC,LMPC, CSNMPC |
| Canned Goods | 7M | 30M | DSWD-7 | SNMPC ,GCMPC,LMPC, CSNMPC |
| Fresh Fish Products | 1M | DSWD-7, UC MED hosp | LOCAL FISH PORT | |
| Vegetables & Spices | 2M | DSWD-7 | LAMAC, LOCAL MARKET | |
| Groceries, eggs | 3M | 16M | DSWD-7 | SNMPC ,GCMPC,LMPC, CSNMPC |
| Fresh Meat | 1M | DSWD-7, UC Med Hosp, Golden peak hotel | LOCAL MARKET | |
| Total | 20M | 120M |
Good Practices and Innovations
Figure 2. Transaction Process Flow
Impact
In the coop-to-coop business model, AgriCOOPh played the role of market contracting and product consolidator. For the supply of rice, for example, AgriCOOPh enters a supply arrangement with primary cooperatives that own rice milling facilities. For processed food items, cooperative marts were tapped as suppliers, with products sourced from food manufacturing companies and distributors. Specifically, these resulted in the following benefits:
1. Higher Volume in Public and Private Food Procurement Programs
The public procurement process is complex; it requires staff resources with technical knowledge in the preparation of bidding documents and securing the necessary permits and licenses from different government agencies based on the type of commodity. Partnering with a cooperative eases that burden and delivers peace of mind. AgriCOOPh will also provide technical assistance to member cooperatives if the cooperative is engaged in direct participation in the bidding process with the government agencies, saving them considerable time while adding expertise.
2. Cost Reduction
Another benefit is significant cost savings. Aggregating requirements and standardizing product and service specifications give different government agencies, private institutional buyers, and cooperative consumers purchasing power. AgriCOOPh generally offers contracts that are broad in scope, so the product or service needed by the buyers is included. Member cooperatives will reduce their administrative as well as their production costs due to economies of scale.
3. Connect Buyers with Top Suppliers
Buyers ensure to receive bids from larger suppliers who might offer lower prices and better products. Connect with quality products and services while offering negotiating power that gives both the buyer and cooperative member supplier the best value. This improves both public and private procurement processes by handling the toughest elements and providing the best contracts for the best products at the most competitive prices.
4. Establish Long Term Relationships
Good cooperative purchasing builds strong relationships with both the buyers and suppliers to better support public and private procuring institutions. If a challenge or question comes up, AgriCOOPh can step in to assist the members.
5. Improving the Public and Private Procurement Process
A high-quality purchasing partner brings many benefits to buyers. There are many factors affecting the procurement process in public and private institutions, but a good process should include detailed, consistent steps in the awarding of contracts. AgriCOOPh can be a strategic partner that can align with public and private procurement procedures, which makes the procurement process easier and more sustainable.
Factors that helped actualize the innovations
- The Enhanced Partnership Against Hunger and Poverty (EPAHP)
- AgriCOOPh as consolidator with 42 member cooperatives
- Availability of network of financial resources
- Strong coop-to-coop linkage
- Established international partners
- Highly competent officers and staff
- Well-represented in the government policy-making body (House of Representatives, Local Government Units)
- Availability of logistical support (i.e transport, personnel, etc.)
- The strategic location of member cooperatives
Challenges faced during implementation
- Expensive bidding documents for public procurement
- Delayed payment from buyers
- Changes in the contract terms and conditions (i.e delivery schedule, types of goods, etc).
- Inadequate supply of a commodity
- Bad weather conditions
- Local Government Unit Policies (i.e influenced by local traders, etc.)
- Inconsiderate buyers (i,e penalties due late delivery, type of goods)
- Commodity rejection of buyers
- Commodity damage during transport (i.e. breakage, leaking, etc.)
- Shortland and overland
- Inadequate commodity checking at the buyer
- The tedious and costly public bidding process
Lessons Learned
- Proper transaction documentation
- Establish proper systems and procedures
- Establish a good rapport with the buyer and supplier
- Establish good communication with buyers and suppliers
- The checker must be properly trained and empowered to decide based on established policies and procedures (i.e initiative, common sense, etc)
- Strict implementation of quality control at source by commodity specification
- Increase product demand of member cooperatives, resulting in active participation and motivation to increase their production output
- Increased farmer-member economic activity, resulting in an increase in income.
Recommendations
- Waiver of payment for bidding fees participated by cooperatives
- Exemption of the imposition of a 3% withholding tax deducted from the cooperative supplier
- More access to credit to financial institutions (i.e bridge financing on working capital, long-term loan for fixed assets, etc)
- Strengthen the development of farmer-level enterprises
For more information, contact agricooph@gmail.com
Comments are closed