Generating Rural Opportunities by Working with Cooperatives .           BACKGROUND This activity seeks to expand rural livelihood opportunities and boost rural householdsrsquo; incomes and overall socio-economic well-being  by facilitating the evolution of large  successful local cooperatives and federations and other aggregations of cooperatives into Local Resource Organizations (LROs) that will provide in-depth mentoring and capacity development support  as well as support participation in value chains  to sub-performing (small  micro and medium) agri-based cooperatives. This activity is an integral part of USAID/Philippines Local Works programming titled LiLok[1]  which aims to advance locally-owned approaches to address development challenges in the Philippines and contributes to the current USAID/Philippines Country Development and Cooperation Strategy (CDCS) goal of a ldquo;more stable  prosperous and well-governed Philippinesrdquo;. The activities focus on cooperatives and rural  agri-based sector is aligned directly with the CDCS Development Objective 1: Broad-Based and Inclusive Growth Accelerated and Sustained. The activity is part of the USAID/Philippines activity ldquo;Economic Growth  Democracy and Governance with Equityrdquo; (EGDGE) Activity and specifically supports the EGDGE Programrsquo;s goal of ldquo;economic development is made more inclusiverdquo; and the sub-objective of ldquo;environment for trade and investment is made more open and competitive.rdquo; By focusing on agri-based cooperatives  and aiming to undertake work on value chains  the activity works on the nexus of USAIDrsquo;s emphasis on enterprise-driven development [2] together with the Agencyrsquo;s locally-led development mandate under Local Works  and the Journey to Self- Reliance. The activity will also support the Philippine Governments 2017-2022 Philippine Development Plan (PDP)  specifically  Chapters 8 (Expanding Economic Opportunities in Agriculture  Forestry  and Fisheries) and 9 (Expanding Economic Opportunities in Industry and Services through Trabaho (work) at Negosyo (business)). The PDP includes objectives of increasing ldquo;access to economic opportunities for micro  small  and medium enterprises (MSMEs)  cooperatives  and overseas Filipinos (OFs)... to reduce inequality and poverty rdquo; as well as improved access to finance for MSMEs and cooperatives. Local Works In 2015  the United States Congress enacted a new Small Grants Program  which has been designated as Local Works  to provide small grants  cooperative agreements  and other assistance mechanisms and agreements to further promote and support local initiative  resources and action in countries where USAID operates. Local Works seeks to invest in the creativity and resourcefulness of local communities  enabling them to drive their own development. In February 2017  the Philippines was selected as one of the countries where Local Works will be implemented. Local Works bases its approach on the understanding that there are local assets  commitment  and capacity for development everywhere USAID works. As part of its mandate to promote locally-led development  Missions that are implementing Local Works will seek to engage with local resource organizations (LROs)  which provide resources and services to other organizations.[3] LROs are ldquo;trusted by other local organizations and are seen as ldquo;hubsrdquo; for ideas and resources. They are the connectors and influencersmdash;the organizations that others go to for help  advice  or expertise. They are capable of supporting other local organizations to better serve communities.rdquo;[4] This wholesale approach enables USAID to efficiently manage Local Works programming which at the same time supports local institutions that other smaller and less able organizations and communities can rely on after Local Works implementation has concluded. The Role of Cooperatives in Addressing Livelihood and Socio-Economic Challenges in the Rural AreasThe Mission started its Local Works operations by embarking on open listening exercises[5] from January to March 2018 in cities and municipalities in 10 out of 16 regions in the Philippines to identify community challenges as well as local assets that are being leveraged to resolve issues. During the listening visits  livelihood challenges came out as the top issue. Mission staff who embarked on the tours noted the critical role of local cooperatives  especially those with a focus on agriculture or agribusiness  in addressing some of the livelihood challenges faced by residents as narrated by individuals and group representatives. In many areas  cooperatives - whether small or large - provided critical support services  including technical assistance  access to credit (e.g.   for farmers to be able to buy farm inputs to properly plant crops  and micro entrepreneurs to buy inputs to be used in production or for direct re-sale)  provision of quality inputs  equipment rental or use (e.g.  tractors for the farm  and machines to process harvests  or other products)  market information and market linkages (e.g.  farmers selling through the cooperatives with the organization acting as an aggregator  and negotiating with commercial buyers)  and higher producer prices. By definition  cooperatives are formed for individuals to help each other ldquo;achieve their social  economic and cultural needs.rdquo;[6]Beyond benefiting its members  cooperatives also benefit their host communities. By law  at least three percent of a cooperativersquo;s net surplus funds should be allocated to a community development fund  which will be used for ldquo;activitys or activities that will benefit the community where the cooperative operates.rdquo;[7] Examples are feeding programs  rehabilitation of ecological systems  medical services  small-scale community infrastructure  and other basic services for the poor and other vulnerable groups. A Vibrant Cooperative Sector in the Philippines The cooperative movement has been in place in the Philippines for over 100 years  beginning with the formation of the first cooperative - the Agricultural Credit Cooperative Association of Cabanatuan  Nueva Ecija - in October 1916  in line with the Rural Credit Law which aimed to protect and develop the agricultural interest of the country through rural financing. As early as 1926  there were already 544 rural credit cooperatives in 42 provinces.[8] The important role of cooperatives is explicitly stated in the current (1987) Philippine Constitution  which envisions cooperatives as lsquo;instruments for social justice and economic development.rsquo; Article XII  Section 15  states  ldquo;The Congress shall create an agency to promote the viability and growth of cooperatives as instruments for social justice and economic development.rdquo; The Cooperative Code was enacted in March 1990 by virtue of Republic Act No. 6938 with an updated Code passed in July 2008 (The Philippines Cooperative Code of 2008) through Republic Act No. 9520. There are many examples of how cooperatives have benefited its members  affiliated groups  and host communities. Impact includes employment generation  as well as medical and access to feeding services. There are also plenty of success stories of cooperatives who are not only able to sustain their operations but have managed to significantly increase their asset base  capitalization  and membership. At the end of 2017  the Cooperative Development Agency (CDA)  the regulatory agency that oversees cooperatives in country  reported a total of 27 626 registered cooperatives  composed of an estimated 14 million members.[9]  This figure represents 13 percent of the total Philippine population [10] and over 20 percent of adult Filipinos[11] In terms of employment generation  about 380 000 individuals are employed by cooperatives.[12] Given the large proportion of the population involved in cooperatives and their important role in development  federations and unions of cooperatives have succeeded in getting representation in the Philippine Congress through the party-list system.[13] Most cooperatives are classified as micro and small with only a small proportion having larger asset bases.[14] In 2017  80 percent of cooperatives were classified as either micro (54%) or small (26%) with only 15 percent and 5 percent  considered medium and large  respectively. As of 2014  the Philippines has 211 secondary and six tertiary federations. The CDA classifies cooperatives into 26 types[15] Out of the total number  more than half are multi-purpose cooperatives. Beyond MPCs  credit  service  consumer  and producer cooperatives form the bulk of cooperatives in the country.[16] Challenges Faced by Cooperatives While many cooperatives have flourished  many face challenges in their operations which can be seen in the amount and percentage of Philippine cooperatives undergoing dissolution  liquidation  cancellation  and delisting (DLCD) procedures. This means that almost three out of ten cooperatives had trouble complying with rules on cooperative operations or are had problems in their operations. Additionally  when comparing the number of newly-registered cooperatives with the number of delisted cooperatives data show that for every ten new registrations  roughly five cooperatives get delisted. In the Philippines cooperatives face difficulties in the areas of: governance  internal capitalization  misaligned needs of host communities  weak business plans and inadequate operational policies (as internal auditing); limited staff and financial capacity to deliver offered services. In general  cooperatives are often created by and too dependent on incentives for creating cooperatives as vehicles to solicit funds rather than an organic process.[17] Lagging Development in Rural Areas  Poverty Highest among Agricultural Workers While the Philippinesrsquo; economic performance has been impressive  growth has not been significantly inclusive. Six years of consistent GDP growth has had a positive impact on poverty  with rates falling from 25.2 percent in 2012 to 21.6 percent in 2015 [18] but this reduction has been slow  especially when compared to the performance of the Philippinesrsquo; ASEAN neighbors. High levels of inequality have persisted. The Gini coefficient  the official measure of income inequality  has declined only minimally (e.g. from 0.465 in 2012 to 0.44 in 2015[19])  and has consistently been the highest in the Region. Over 20 million Filipinos fall below the poverty line  particularly in the rural sector where the poverty incidence of 30 percent is above the national average (close to 40 percent of farmers and fisherfolk are considered poor[20]).[1] ldquo;LiLokrdquo; is the abbreviation of ldquo;Likhang Lokal rdquo; a Filipino phrase  roughly translated as locally-made or made locally. The chosen abbreviation ldquo;LiLokrdquo; means a sculpture or carving (noun)  or to carve or sculpt (verb).[2] In December 2018  USAID launched the Private Sector Engagement Policy  an ldquo;an Agency-wide call to action  and a mandate to work hand-in-hand with the private sector to design and deliver our development and humanitarian programs across all sectors  and to harness our resources to open markets and other opportunities for U.S. businesses.rdquo; The policy defines the ldquo;private sectorrdquo; as: ldquo;for-profit  commercial entities and their affiliated foundations; financial institutions  investors and intermediaries; business associations and cooperatives; micro  small  medium and large enterprises that operate in the formal and informal sectors; American  local  regional  and multinational scale businesses; and for-profit approaches that generate sustainable income (e.g.  a venture fund run by a non-governmental organization (NGO) or a social enterprise).rdquo; https://www.usaid.gov/work-usaid/private- sector-engagement[3] Local Works draft application guide for USAID Missions. September 2017.[4] USAID Local Works orientation deck for the Philippine Mission. April 2017.[5] Open listening is a type of listening that engages with individuals or groups with a more open or broad agenda  incontrast with typical development partner consultations where conversations revolve around a specific agenda. The Mission had conversations around issues and challenges  as well as local assets and resources that are working to resolve them  as well as recommendations.[6] The Philippines Cooperative Code of 2008 (Republic Act No. 9520) defines a cooperative as an ldquo;autonomous and duly registered association of persons  with a common bond of interest  who have voluntarily joined together toachieve their social  economic and cultural needs and aspirations by making equitable contributions to the capital required  patronizing their products and services and accepting a fair share of risks and benefits of the undertaking in accordance with the universally accepted cooperative principles.rdquo;[7] Republic Act No. 9520  Chapter X: Allocation and Distribution of Net Surplus.[8] Cooperative Development Authority webpage. http://www.cda.gov.ph/transparency/overview/historical- background[9] Cooperative Development Authority. 2017 Annual Report.[10] The current size of the Philippine population is estimated at 104.9 million individuals.[11] Around 62% of Filipinos are aged 18 years and over  as recorded during the 2015 Census of Population and Housing administered by the Philippine Statistics Authority.[12] Cooperative Development Authority. 2017 Annual Report.[13] As enshrined in the 1987 Constitution  Republic Act No. 7941 (Party-List System Act) of 1995 introduced the party-list system where marginalized and underrepresented sectors  such as labor  peasant  fisherfolk  urban poor  indigenous cultural communities  elderly  handicapped  women  youth  veterans  overseas workers  and professionals are given the opportunity to participate in law-making by running as organized parties. Every 2% of votes in general elections gives the winning party one seat  for a maximum number of three seats even if they get more than 6% of total votes.[14] The size classification of cooperatives are as follows: micro - cooperatives with assets up to $3 million; small - cooperatives with assets in between Php 3 million and 15 million; medium - cooperatives with assets in between Php15 million and Php 100 million; large - cooperatives with at least 100 million in assets.[15] Cooperatives fall under the following classifications: advocacy  agrarian reform  consumers  cooperative banks  credit  dairy  education  electric  federation  financial services  fishermen  health services  housing  insurance  labor service  marketing  multi-purpose  producers  service  transport  union  water service  workers.[16] Cooperative Development Authority. 2016 Annual Report.[17] Lab-oyan  Lotes P. ldquo;Issues and Challenges Confronting Cooperatives rdquo; April 2  2018. Herald Express  Baguio City  Benguet.[18] Philippine Statistics Authority. (2016  October 27). Poverty incidence among Filipinos registered at 21.6% in 2015 [Press release] Retrieved from https://psa.gov.ph/poverty-pressreleases/pr/2015%20Full%20Year%20Poverty%20Statistics[19] Philippine Statistics Authority (2017). 2015 Family Income and Expenditure Survey.[20] Philippine Statistics Authority (2017). 2015 Poverty Statistics for Basic Sectors. GROW-Coop seeks to improve the socio-economic conditions of female and male members of cooperatives and their communities and expand rural livelihood opportunities..Towards this end  GROW-Coop will pursue interventions that (1) improve organizational performance of cooperatives  and (2) expand business opportunities of cooperatives.To improve organizational performance of cooperatives  this activityActivity will (1.1) improve successful cooperativesrsquo; capacity as  Local Resource Organizationsrsquo; (LROs)  to deliver services for organizational strengthening  and (1.2) improve the developmental and regulatory policies for cooperative performance. To expand the business opportunities of cooperatives  this activity will (2.1) improve successful cooperativesrsquo;capacity as  Local Resource Organizationsrsquo; (LROs)  to deliver services for business development  and (2.2) improve the business environment for THEORY OF CHANGE Economic growth in agriculture is the most important driver of poverty reduction as poor people are concentrated in this sector. Productivity and efficiency increases are key drivers of economic growth. At the same time  governments have an important role to create an enabling environment that allows the private sector to thrive and remove legal or other obstacles that might hinder the development of the companies. But foremost  private sector development needs to be based on bottom-up approaches to legitimize the change and make it more effective as the people feel involved in the new direction of a region or country. Cooperatives have in that respect proven to be powerful agents of positive socio-economic change  a self- development model  given the nature of their membership structure. However  serious challenges remain with regard to sustaining operations and proper management  thereby affecting capacity to benefit members and respective communities. The positive impact of cooperatives on structural transformation in emerging economies goes beyond the quality of individual cooperatives or producer associations. The very fabric of social-economic associations ndash; their horizontal and vertical integration into federal structures and higher-level cooperatives  their participation in various bodies for dialogue  cooperation and joint implementation (with entities of the state or other social groups) ndash; has a beneficial effect on macro-economic growth  diminishes unsustainable practices through more efficiency and upscaling  and strengthens the democratic empowerment of farmers. The theory of change therefore is that if successful agri-based cooperatives  federations and other relevant organizations are developed into local resource organizations (LROs) that will provide capacity building and agri-business development services to sub-performing (small  micro and medium) agri-based cooperatives  and if an enhanced policy and business environment is pursued  then  governance  operations and sustainability will be improved  and under-performing (small  micro and medium) agri-based cooperativesrsquo; performance as players in value chains will be enhanced  which in turn will contribute to improving socio-economic conditions of female and male members and their communities and expanding rural livelihood opportunities. V.            APPROACH Agri-based cooperatives can play a crucial role in local economic development and in adding value for rural areas while at the same time promoting self-reliance in line with USAIDrsquo;s mandate. Nonetheless  agricultural cooperatives in emerging economies need advice and support to improve their financial management  governance and business to thrive in a growing competitive environment in food production. Based on past experience  education levels  business focus  local government support  infrastructure and financial positions are  critical factors that may affect  the development of cooperatives  especially the smaller ones. In practice  this means the GROW-COOP activity needs to focus on improved management skills  a clear business strategy  educated staff and members  and practical examples and support to run their cooperative business better. And this requires a structured support approach by Local Resource Organizations (LROs)  including a professional peer network and customized business management services  to improve the performance of smaller cooperatives in need. Cooperatives that will be capacitated as Local Resource Organizations (LROs) will primarily be federations like the Federation of Peoplersquo;s Sustainable Development Cooperative (FPSDC) and the Philippine Family Farmers Agriculture Fishery Forestry Cooperatives (AgriCooPh)  whose role and mandate is to provide services to its member cooperatives  but also primary ones like the Sorosoro Ibaba Development Cooperative (SIDC)  who can provide services to other cooperatives who will be linked to their value chains. Other cooperatives or federations to serve as LROs will be  identified during the implementation of the activity. On the other hand  cooperatives who will receive capacity building support from the LROs will be small and micro cooperatives who will be linked to their value chains  as well as underperforming medium-sized cooperatives as long as they bring in small and micro cooperatives in their value chains or provide the needed logistical or consolidation support to them. The strategy to include under-performing medium-sized cooperatives recognizes the limitations of micro and small cooperatives to meet volume requirements of large value chains which may be addressed by working with the medium-sized cooperatives that have the logistical capacity to bridge the gap. In terms of the value chains that will be prioritized by the activity  these will be those existing value chains of LROs and medium sized cooperatives that are already established and have high chances of success  rather than start up or value chains that still need development. These value chains will initially include livestock  feeds  muscovado sugar  coconut sugar  organic rice  cassava  cacao  dairy  and colored rice. This focus is based on the current consortium membersrsquo; involvement and expertise in these value chains to make sure the LRO model will work. Large cooperatives that are the lead firms in stable value chains will integrate sub-performing (small  micro and medium) agri-based cooperatives as new players along their respective value chains for mutual benefits. The LROs have the knowledge in the value chain  and interest to share their knowledge with the smaller cooperatives  and in the end  can benefit all parties involved by developing new businesses together. This will provide the right incentives for the LROs and cooperatives to work together in this activityActivity and will ensure a sustainable approach for the long run.  In the case of SIDC  the primary value chains will be livestock and feeds   while for FPSDC  these will be the organic rice  muscovado sugar and coconut sugar value chains. Both organizations have national level value chains. For AgriCooPh  value chains of rice  cacao and dairy will be eyed mainly. The under-performing (small  micro and medium) agri-based cooperatives will receive specific technical and management advice from the lead cooperatives to bring their production and management capacities to a more efficient and effective level. The large cooperatives providing advice  training and mentoring to under-performing (small  micro and medium) agri-based cooperatives will serve both their business growth interests and will convert them into a more competitive chain that will provide additional jobs and generate new income for the local farming households in several regions of the country  like region IV-A (CALABARZON)  IV-B (MIMAROPA)  V (Bicol)  VI (Western Visayas)   X (Northern Mindanao)  XI (Southern Mindanao)  and XII (SOCCSKARGEN). The large cooperatives that will serve as the LROs will also provide the same set of services to durable value chains where a mix of medium and small cooperatives are involved in the Philippines. Potential value chains where cooperatives can increase their participation include cassava and cacao. Additionally  GROW-Coop will target participation of target sub-performing cooperatives in at least one international value chain. The activity will also develop access and partnership with the value chains of the private sector in agribusiness and e-commerce. These are also seen as essential elements for sustainability as private sector value chains still dominate the agribusiness and e-commerce sectors. Aside from gaining access  the activity seeks to create a more fair business modality on deals and transactions along the value chains of both private sector and large cooperatives. GROW-Coop will take advantage of existing public-private platforms (e.g.  Agribusiness Support for Promotion and Investment in Regional Expositions) and deepen or establish linkages with the private sector  as individual firms  or through established groups (e.g.  Philippine Chamber of Commerce and Industry  Makati Business Club   American Chamber of Commerce of the Philippines  Joint Foreign Chambers  and the US-ASEAN Business Council). In the GROW-COOP Activity  effective cooperation and coordination will be sought with national agencies  private companies and local government to promote the innovative approach with the LROs and to source more support locally for the cooperatives to be strengthened. The Activity will extend under-grants to LROs to carry out the work with the objective to realize the activity objective to improve the socio-economic conditions of female and male members of cooperatives and their communities and expand rural livelihood opportunities; and develop a sustainable system towards self-reliance by the Philippine cooperative community. At the same time  the activity will drive a cooperative reform agenda through consultations  participatory research and proposal development for reform initiatives  and build reform coalitions while considering governments ambitions.   Strong technical advice and knowledge transfer will help to transfer best practices. GROW-COOP will collaborate with relevant USAID/Philippines activities currently being implemented to maximize outcomes.    VI.           ACTIVITY DESCRIPTION The overall goal of GROW-Coop is to expand the socio-economic conditions of female and male members of cooperatives and their communities and improve rural livelihood opportunities. It seeks to improve the organizational performance of cooperatives and expand their business opportunities. To achieve the desired outputs and outcomes  GROW-Coop will undertake specific activities per objective and sub-objective (For more details  see Annex A ndash; Activity Results Framework). OBJECTIVE 1: Organizational performance of cooperatives improved Sub-performing (small  micro and medium) agri-based cooperatives need to improve their performance. This means stronger governance and more efficient and sustainable operations  among others. This will be done through (1) improving LRO capacity to deliver services for organizational strengthening  and (2) improving organizational capacity of under-performing (small  micro and medium) agri-based cooperatives. SUB-OBJECTIVE 1.1: LRO capacity to deliver services for organizational strengthening improved Successful cooperatives can act as Local Resource Organizations that can help smaller cooperatives grow. But their capacity needs to be improved so that they can better deliver the needed services to strengthen under-performing (small  micro and medium) agri-based cooperatives. Towards this end  they will be oriented and trained on the use of Agriterra systems and tools  including scoping  assessment and business advising. They will also receive training of trainers in key topics such as governance  financial management  sustainable services  and advocacy. They will also receive coaching during the initial delivery of services to the under-performing (small  micro and medium) agri-based cooperatives so that they can perform their role at the highest quality possible. OUTCOME 1.1a: System of delivering services by successful cooperatives to under-performing (small  micro and medium) agri-based cooperatives established This activity will establish a system of delivering services by successful cooperatives to under-performing (small  micro and medium) agri-based cooperatives. The system will build on the Agriterra system of delivering advice  training and exchange to agricultural cooperatives in the areas of governance  finance and business development. It will consist of (1) a consolidated database of potential LROs  key experts  target coops  systems and tools to be used (Agriterra  USAID  CDA  etc.)  (2) capacity building program for cooperatives  federations and other relevant organizations to serve as LROs (including the 8-step management cycle and key cooperative trainings and services by Agriterra on governance  financial management amp; value creation)  (3) a pool of experts for peer-to-peer learning by LROs and long-term mentor pairing between LROs and target cooperatives  and (4) dashboard and KPI analysis and monitoring (using Agriterrarsquo;s online management information system  the agro-info.net or AIN). During the implementation  Agriterra will coordinate the support to under-performing (small  micro and medium) agri-based cooperatives by LROs. Agriterra has already established in its Dutch government program deep working relationships with the big cooperative actors in the Philippines: SIDC  FPSDC and Landbank (via Landbank Countryside Development Foundation  Inc.  or LCDFI) and other large cooperatives and covering the majority of the Philippine regions  as well as the AgriCooPh. In consultation with USAID  the consortium  the Cooperative Development Authority (CDA) and other relevant actors  a final list of LROs and experts will be recruited for implementing the activity. In the recruitment phase the activity staff will carry out interviews to gather  map and rate the LRO experts to ensure quality and rapid deployment during the activity phase. Agriterra will provide its web-based management information system agro-info.net to centralize the expertise in the LROs. This system is customized for cooperative entities and experts. It currently has a database of around 800 cooperative experts for deployment in advisory assignments for cooperatives. During the activity period  the LRO experts will be trained in Agriterra tools and services suitable to enhance their capacities  and they will be supported through the web-based system agro-info.net of Agriterra to make sure all activities and impact can be monitored and measured properly. Agriterra plans  advises  coaches and monitors cooperatives and their progress via its 8-steps result management system. This work approach is proposed to be used for measuring and carrying out activities with the selected agricultural cooperatives. Agriterra will take the lead  but for every capacity building plan  the consortium or other LROs will be involved in the implementation. The consortium partners and other big cooperatives will evolve into LROs with the support of Agriterra who will provide intervention systems and tools already developed (see training.agriterra.org for all trainings and tools available). Illustrative Activities:1. Setting up of database on activity partnersrsquo; profile  relevant stakeholders  policies and programs on cooperative development and major agri-based value chains2. Inception workshop with key activity partners and relevant stakeholders on activity direction and year 1 priorities3. Recruitment and training of experts from key activity partners that will serve as local agripoolers/consultants to the target under-performing cooperatives4. Development of Agro-Info Network dashboard specific  for GROW-Coop activity monitoring and KPIs OUTCOME 1.1b: Organizational capacity of under-performing (small  micro and medium) agri-based cooperatives improved This activity will improve the organizational capacity of under-performing (small  micro and medium) agri-based cooperatives through the delivery of services by the LROs whose capacities have been improved. LROs will do a scoping and produce a short list of under-performing (small  micro and medium) agri-based cooperatives that can be linked to their value chain or that of the private sector. Then they will select who among them will undergo the assessment based on agreed criteria. From the assessment  they will draw up action plans for short- and long-term interventions with the selected cooperatives. These will consist of training activities  advice and exchange that they need in order to improve their organizational capacity. In the inception  available databases with government and the consortium partners will be used to list cooperatives to be assessed. Selection criteria will be decided upon in terms of number of members  minimum track record in agribusiness (in turnover and value addition)  capacity building needs  possibility for cooperative clustering  commodities  and geographical priorities (based on presence of activity implementers). In general  a spill-over effect of this approach will be reached in the most efficient way by focusing on similar services  commodities and geographical areas as the key knowledge distributors in the program (FPSDC/SIDC/AgriCooPh and other LROs)  but this also depends on the preferences from USAID and government actors. Based on this list  a short scoping assessment will be carried out by the consortium partners to get to a short-list of cooperatives to be supported in the activity. Agriterra assessment tools will be used to measure the state of the cooperatives in terms of financial management  governance  business performance and reputation. Based on assessments per micro and small cooperative  a capacity building plan will be defined to tackle the challenges in the organization. Each action plan will define activities carried out by the consortium partners. Agriterra will support the consortium partners by providing its web-based system and guidance for the use of advisory and training tools. SIDC  FPSDC  AgriCooPh and other LROs will commit to provide needed expertise and to provide coaching for the selected group of cooperatives. During the assessments  the formal cooperative conditions and audit standards will also be reviewed to make sure the assessment will also deliver relevant information for other supporting entities. This mechanism will be incorporated in existing established programs for the same target groups to make sure interventions are not overlapping and provide synergy with these programs in the specific areas where support is provided by other programs or activitys. The consortium and LROs will also exchange their methodologies and products with federated structures and unions of cooperatives to make sure the impact of the program is optimized and leads to sustainability and impact on national scale. The LROs carrying out the assignments will be paid for the advisory services in line with the peer-to-peer approach of Agriterra in the form of sub-contract agreements based on coop-to-coop rates. Agriterra is deploying as many experts as possible in the activity from LROs to support their smaller counterparts with advice and training together with Agriterra staff in the implementation. This ensures the commitment and quality by the consortium members and really adds value for all involved. AgriCooPh and FPSDC will be involved for follow-up of the implementation  by taking over the coordination role by Agriterra in due course to ensure sustainability in the long-run. The activity will also use Agriterrarsquo;s web-based system agro-info.net to measure and keep track of the progress per participating cooperative in terms of activities and impact. The application contains data about Agripool experts and brings together information on activitys  advisory assignments and training events with and for farmer-led organizations and businesses. The system is accessible by all cooperatives in the Agriterra network  who provide key data through online applications and surveys. The Agriterra system is customized for cooperative entities and contains currently a database of 1600 agricultural cooperatives and farmer organizations worldwide. Illustrative Activities:1.     Scoping of potential coops that will supported by the LROs on capacity building2.     Assessment of selected coops to identify the focus areas on capacity development3.     Action planning with selected under-performing cooperatives to plot out targets and schedules of engagement  SUB-OBJECTIVE 1.2: Developmental and regulatory policies for cooperative performance improved The performance of cooperatives is greatly affected by developmental and regulatory policies prevailing in the country. These policies need to be improved through a bottom-up advocacy process that brings the interest and concerns of cooperatives to decision makers. This also necessitates a review of existing laws that either enable or hinder good cooperative performance. OUTCOME 1.2a. Policy reforms to improve the enabling environment for agri cooperatives advanced This activity will advance policy reforms that can improve the enabling environment for agri-based cooperatives. Agriterrarsquo;s Farmer Advocacy Consultation Tool (FACT) will be used to deliver a bottom-up process of generating policy proposals. This approach is based on the four pillars of (1) consultation among cooperative members in order to raise their issues and concerns  (2) participatory research to come up with primary and secondary data to support the proposal that will be developed  (3) writing proposals in a SMART way to ensure that they cannot be ignored by decision makers  and (4) lobby mapping and stakeholder analysis in order to prioritize and plan engagements with decision makers. USAIDrsquo;s CLARITY tool will also be used to do a review of relevant laws and policies to identify enabling and hindering provisions and recommend potential changes to the respective government institutions. This whole process will produce (1) policy/position papers on agri cooperative development (e.g. roadmap  amendments to laws  specific policy proposals from coops)  (2) advocacy plan  and (3) advocacy activities. In 2018  Agriterra trained SIDC  FPSDC and some other key cooperatives in public affairs management by providing its Farmers Advocacy Consultation Tool (FACT). Based on this workshop  FPSDC and SIDC have formulated some policy proposals to make sure an enabling environment will be achieved for the cooperative sector by preparing lobby plans towards relevant government departments. In this program  support activities will take place to increase visibility and impact by the cooperatives in the economy by training in advocacy skills and coming up with a policy agenda to transform the cooperative sector in a profitable sector attracting new members. A consultation among targeted micro and small agricultural cooperatives will be conducted in order to gather their needs and recommendations for improving the policies for agricultural cooperatives and to identify other policy issues that affect their growth and development. These policy recommendations will be informed by a participatory research with the use of experts from the agricultural cooperative sector as peer to peer source of knowledge and advise. The proposals will be written in a SMART way and advocated effectively through a lobby mapping and stakeholder analysis of key decision makers on policies affecting the agricultural cooperative sector. One possible outcome of this process will be an agricultural cooperative roadmap or development master plan that will bring together all stakeholders and harmonize their different support and interventions towards agricultural cooperative development in the Philippines. Such a roadmap or master plan can be an input to the new cooperative development roadmap that the CDA will produce. This agricultural cooperative roadmap can draw from the experience of Agriterra in other countries like in Vietnam and Nepal. This can also be aligned with the ASEAN agricultural cooperative roadmap that Agriterra helped to develop and lobby for approval at the ASEAN. Illustrative Activities:1. Consultations among the LROs and the partner micro  small and medium agricultural cooperatives2. Participatory research by policy experts on current state and situation of agricultural cooperative sector3. Proposal writing on relevant policy reforms and improvements on the enabling environment for the agri-coop sector4. Lobby mapping amp; stakeholder analysis in support of policy reforms and improvements on agri-coop sector enabling environment  OBJECTIVE 2: Business opportunities of cooperatives expanded Under-performing (small  micro and medium) agri-based cooperatives need to expand their business opportunities through value chain participation  partnerships  joint ventures  and coop to coop trade. This can be done by (1) improving LRO capacity to deliver services for business development  and (2) improving the business environment for cooperative performance. LROs will be involved in two ways in the value chain approach in this activity. First of all  by bringing targeted cooperatives in the activity to the value chains of the LROs. Secondly  LROs would strengthen existing and add new cooperatives to specific value chains outside of the LROs. All training and mentoring will be aligned with the objective of having the micro  small  and medium cooperatives participate (be included) and improve their effectiveness and efficiency as new chain actors either in the value chain of the LROs or the targeted value chains outside of the LRO. Agriterra not only works with individual agricultural cooperatives but brings them together also in enterprise partnerships. Data gathering of products and services of agricultural cooperatives will be done to match supply with demand in business deals and actual purchase orders. This has been done by Agriterra among clients in a cooperative summit last year in the Philippines among six cooperatives  resulting in concrete leads for business deals in several value chains. This initiative will be scaled-up through this activity where joint ventures or federalized arrangements can be established. The increased capacity of the targeted cooperativesrsquo; operations and improved business performance as a consequence of the intensive mentoring by the LROs and the structured approach has to be capitalized. This means that the LROs and target cooperatives will define specific activities to attain leads and unlock new business opportunities in the respective value chains. To achieve impact  a strong commodity approach is needed from the outset to make sure the expertise of the LROs match the needs of the targeted micro and small cooperatives  but also that synergy can be found amongst targeted micro and small cooperatives. This could also lead to joint ventures with the LROs as long as this benefits mainly the targeted cooperatives. The consortium has broad experience with establishing market linkages in value chains and obtaining access to finance which is often needed to capitalize business opportunities. Involvement of LCDFI and other financial institutions is also crucial as they have strong links with local financial institutions providing working capital and investments for cooperatives and its members. Based on the geographical location  commodity and business performance of the target cooperatives  a business engagement plan will be established  supported by LRO advice and in coordination with CDA and USAID to strengthen existing programs. SUB-OBJECTIVE 2.1: LRO capacity to deliver services for business development improved Successful cooperatives  acting as Local Resource Organizations  need to improve their capacity to deliver services for business development of under-performing (small  micro and medium) agri-based cooperatives. This can be done through capacity building on performing business analysis and the use of tools like the value creator. This will also include coaching on how to deliver business advice throughout the activity period. OUTCOME 2.1a. Capital for value chain participation of under-performing (small  micro and medium) agri-based cooperatives (internal or external) accessed This activity will allow under-performing (small  micro and medium) agri-based cooperatives to access the needed capital for value chain participation. With the business development services provided by LROs  they will become more professional and bankable cooperatives. Specifically  this will be done through (1) capacity building program for cooperatives  federations and other relevant organizations as LROs providing business development services and business facilitation  (2) market and business pairing studies for potential commodities and geographical area  (3) under-performing (small  micro and medium) agri-based cooperativesrsquo; business plans. The activity will focus its market studies on value chains that have private sector with strong market leadership as lead firms; and value chains that are linked to global markets. The results of the study and private sector engagements will be used to develop business plans for the agri-coops being assisted.  The combined elements of increased management and business capacities  presence of business plans anchored on solid market studies  will allow the under-performing agri-based coops leverage to access resources.   The activity through the LROs  will anchor dialogues and meetings with interested financial and resource institutions to facilitate the accessing of resources needed by the under-performing agri-based cooperatives to effectively perform their roles in value chains.    Illustrative Activities:1. Inception workshop with activity partners and relevant stakeholders from the target value chains and financial institutions2. Market studies on potential value chains with private sector participation and global markets linkages3. Business planning among LROs  under-performing agri-based cooperatives and relevant private sector organizations  OUTCOME 2.1b. Participation of under-performing (small  micro and medium) agri-based cooperatives in agricultural value chains increased) With the capacity building interventions received from successful cooperatives  under-performing (small  micro and medium) agri-based cooperatives will be able to increase their participation in value chains. The activity sees the participation of the target cooperatives in two types of agricultural value chains; the VCs led by the LROs acting as consolidators or lead firms and the VCs led by the private sector that are either linked to a national or global value chain. The  participation in value chains will be in  various forms of business agreements between cooperatives and the value chain lead firms/buyers.  These would include securing purchase agreements or contract growing contracts for the small  micro and medium cooperatives to supply the requirements of the VC lead firm  contract growing a to potential joint venture between the lead firm cooperatives and the now improved small  micro and medium agri-based coop.  The activity will also pursue the participation of the target agri-based coops in e-commerce with the aim of having more products from the cooperatives be made available in the e-commerce platforms present in the market.    Illustrative Activities:1. Business linkaging and trade facilitation between LRO and their partner coop with private sector lead firms in identified value chains SUB-OBJECTIVE 2.2: Business environment for cooperative performance improved Similar to developmental and regulatory policies  the business environment for cooperative performance also need to be improved in order for business opportunities for cooperatives to be expanded. There is a need to work more closely with the private sector as a lot of these opportunities can be found in working with them. OUTCOME 2.2a. Business terms for under-performing (small  micro and medium) agri-based cooperatives improved The activity will improve the business terms for under-performing (small  micro and medium) agri-based cooperatives. Led by the activity management committee composed of the consortium partners  it will craft a private sector engagement strategy aimed at improving the ldquo;fairnessrdquo; of transactions between the lead firms and the supplier coops This initiative will cover the value chains that are lead by the cooperatives and the private sector.  The activity will include the following areas to look into; level of transparency of transactions  terms of payments  flexibility and opportunity for price/ contract renegotiations  issues on quality and quantity requirements. The activity will initiate dialogues between the lead firms and coop suppliers as well as facilitate exchange visits of the supplier cooperatives to companies of the lead firms.   These seek to build and increase the level of trust and confidence between the two parties which are deemed vital in effecting any favorable changes on the existing trade and business relations between the lead firms and the micro  small and medium agri-based cooperatives.      Illustrative Activities: 1. PMC  meetings to craft and design strategies on private sector engagement 2. Expanded PMC meetings amp;