Thesis (Master in Management) -- University of the Philippines Mindanao, April 2018

The Sto. Nino. Teachers and Farmers Multi-purpose Cooperative (SNTFMPC) is a cooperative based in South Cotabato and Sultan Kudarat. They offer various products and credir services to their numbers. They also own a gas station and an agri-cultural supply. They have received numerous awards from the Cooperative Development Authority (CDA) and Land Bank of the Philippines (LBP) through the years for their excellent service in the community. In 2009, together with the financial assistance of LBP, they entered into a Production and Purchase Agreement with Kenram Plantations, In. (KPI) to assist farmer-members in transforming their idle lands into oil palm plantations. Under the contract, KPI shall provide technical services and shall purchase all the harvest of members through cooperative. In 2012, three years after planting, the plants started to bear fruits. Harvesting and delivery of marketable fresh fruit bunches (FFB) however, commenced in 2013. The bank has given the cooperative and its farmers a five-year grace period in paying their loans. During the first year of paying loan amortization (6th year of the project), the cooperative already had problems of low repayment and non-payment by farmer-members. Farmers had difficulty of delivering their harvests to the oil mills due to limited hauling trucks. This disadvantage encouraged ffb traders to visit the farmers and offer them a more convenient way of harvesting. The entry of ffb traders was further aggravated by the El Nino phenomenon which occurred in 2015. In an interview conducted among ╥pole-vaulting╙ farmers, FFB deliveries were made to traders for multiple reasons including convenience, prompt payment of FFB sales, and availability of trucking services anytime. Taking into consideration the members╒ poor repayment, the cooperative management decided to have the bank loan restructured for another fifteen years in 2017. Although loan term is extended up to 2032, the cooperative is still on the dilemma on how to win back farmers. This paper was developed to help SNTFMPC in formulating strategies to capture back the harvests that are taken over by the traders and to settle their loan account with the Land Bank of the Philippines. The external and internal environment was analyzed using Mazarrol et. Al╒s Conceptual Framework for a Cooperative enterprise. The key factors ╨ strengths, weaknesses, opportunities and strengths that were obtained from the analysis were categorized and given weights as to its impact on the organization. The generation, evaluation, selection, implementation and evaluation of strategies from the analysis is based on Fred David╒s Comprehensive Strategic Management Model. Results on the analysis made in the study showed that the cooperative has to choose and undertake two strategies for implementation. These are (1) to venture into FFB trading and (2) to acquire more hauling trucks. The first strategy suggests that cooperative shall venture into FFB trading business. It shall be handled but a new unit in the cooperative which shall be created for oil palm trading. As a support to the first strategy, strategy 2 suggests that the cooperative shall secure funds from the bank to purchase new hauling trucks to cater the needs of the farmer-members. To implement the strategies, the agriculture production unit of the cooperative shall undertake fertilizer application program to ensure increased yield and steady harvest. The marketing unit shall deploy harvesters and trucks in the field based on the harvesting schedule calendared in all areas. Following the sharing arrangement of 50:50 wherein 50% of the proceeds is deducted for loan payment and 50% is released in cash to farmer-members, the marketing unit will pay 50% of the total weight of FFB after truck scaling based on its prevailing market price. With this scheme, the cooperative will be able to capture back the harvests that were lost to other traders. Key results areas were outlined in the study to monitors and evaluate the implementation of the said strategies. Control measures were likewise installed to mitigate risks that will be countered in the course of strategy implementation.