New cooperative models boost agricultural development

By 2014, Vietnam had a total of 10,400 cooperatives engaged in agricultural production, only 10% of which were functioning well with reformed production, advanced technologies, and a close connection with businesses.

Since Vietnam’s Law on Cooperatives was issued in 2012, few new cooperatives have been established, while many have been dissolved due to poor performance attributable to an outdated approach which focuses on simply providing input services for agricultural production.

Cooperatives need to strengthen their interconnection to satisfy mass production requirements for registered brands, marks of origin, and certificates of quality. These are the basic conditions for joining the international trade deals Vietnam has signed or is negotiating.

Ma Quang Trung, head of the Department of Economic Cooperation and Rural Development of the Ministry of Agriculture and Rural Development, said, "The role of cooperatives in agricultural production is of great importance because the production of an individual farmer has little competitiveness in the market as Vietnam integrates into the world. Farmers must cooperate to create products of high quality under good and effective management."

In the past, cooperatives provided services to farmers with little connection to outside markets. As Vietnam began to industrialize and modernize, cooperatives revealed a number of shortcomings in their bulky systems, small-scale production, and slow adaptation to market changes.

Many cooperatives produce the same product, leading to lower prices after bumper harvests. In a new roadmap establishing a new model for cooperatives in the 2015-2020 period the Vietnamese government emphasizes the importance of recognizing the role and influence of cooperatives in a market-oriented economy.

Vuong Dinh Hue, head of the Party Central Committee’s Economic Commission, told VOV, "The first and foremost task is to raise awareness. We need to raise public awareness of the role, influence, and economic potential of the collective economy, and the difference between the old and new model of cooperatives. It’s also of great importance to raise the awareness of authorities at all levels on publicizing and implementing the Law on Cooperatives, and putting current policies on cooperatives into practice." 

The new model cooperatives are expected to give a strong boost to Vietnam’s agricultural production by encouraging farming households to be creative in their cultivation, husbandry, and fishing activities.

Under this new model, farmers will be given timely support from the government and cooperatives to increase their competitiveness and tighten their cooperation with businesses.