Implementation time: October – November 2019
Location: An Giang, Da Nang, Son La
Client: DGRV – the German Cooperative and Raiffeisen Confederation in Vietnam
Project leader: Dr. Pham Van Hoi (CARES)
Vietnam has experienced a long period of concentrated production in the form of agricultural cooperatives. This period also means low agricultural production efficiency and food shortage in Vietnam. The strategy to scale up cooperatives and mechanize agriculture in the 1960s and 1970s failed. The main reason is due to weak cooperative management skills (cooperative leaders are mainly from demobilized soldiers, not trained in management and agricultural techniques), and top-down approach, where people do not really own or participate adequately in the planning, monitoring stages, and production (Anh and Huan, 1995).
Changes in macro policy since the mid-1980s have changed the people’s role as owners of productive land – a decisive factor for the success of Vietnam: from a food importer to an exporter of rice. ranked first in the world since the 1990s (Xuan, 1995). Changing the role of people in agricultural production also means inevitable changes in the nature of agricultural cooperatives: from directing production management to providing services to the people (Tuan, 2007). However, the reality is that many agricultural cooperatives stop working or disband later.
However, as commodity production, including export, becomes more and more important in Vietnam’s agricultural production, agricultural production on an individual (people) basis has revealed huge weaknesses in organize, supervise, and implement the production, harvesting, and post-harvest stages to meet the needs of the domestic market, especially the high-end export market (Hoi, Mol et al. al., 2009a, b). In addition, individual production also exposes people to other risks such as labor, technology, capital, security, low-quality or counterfeit production inputs, and market risks. Connecting markets, protecting land, water, and biodiversity resources…
Over the years, with the help of authorities at all levels (eg VietGAP certificate for farmer cooperatives/organizations), commercial organizations (e.g. Fairtrade, 4C, GlobalGAP…), financial institutions other (RaboBank supports coffee cooperatives in the Central Highlands, WB and VnSAT project), export requirements need geographical indications and legal entity status in transactions… cooperatives gradually re-formed under diverse forms such as cooperative groups, farmers’ organizations, cooperatives… These cooperatives are formed by a group of households and decide all the problems of the cooperative by themselves. Through difficult times, some have operated stably and effectively, for example, Lam Vien Coffee Cooperative, Tan Nghia Agricultural Service & Production Cooperative (Lam Dong), Cong Bang Po Co Agricultural Cooperative, the group cooperation on Sustainable Coffee Production Dak Mar (Kon Tum) (IRC, 2018a, b), Ngoc Lan Cooperative (Mai Son – Son La), Farmers’ Credit Fund in Moc Chau Farm Town (Moc Chau – Son La).) …However, most agricultural cooperatives are still struggling with difficulties in organization and operation, production strategy, management/internal control, and market promotion (Hoi, Mol et al., 2009b, IRC, 2018a, b).
2. Objectives
The activity “Survey and assess the operation of cooperatives” is an activity to serve the goal of DGRV’s macro-level approach to cooperatives, contributing to providing input data for the development of cooperatives. formulating the development strategy of the cooperative economic sector of the Ministry of Planning and Investment (MPI). Based on these strategies, DGRV will develop its project to match the development orientation for the cooperative economic sector of its Vietnamese partners, especially MPI and VCI.
The main objective of this consulting bidding package, therefore, is to evaluate the situation and situation of understanding, applying and implementing basic principles of cooperatives (according to 7 principles of cooperatives of ICA) and operational efficiency. of cooperatives (providing services, organizing production and business). The specific research objectives are as follows:
- Building a database to serve the development of cooperative development strategies and other research and activities of DGRV.
- Clearly define the current status of the application and implementation of the basic principles of cooperatives.
- Making concluding assessments on the basis of qualitative and quantitative on the application and implementation of the basic principles of cooperatives.
- Clearly define the situation, the actual status of service provision to the members of the cooperative (it should be clearly defined according to the nature of the cooperative).
- Clearly define the production and business situation of cooperatives.
- Making assessments and conclusions on the basis of qualitative and quantitative on the situation of service provision, production and business of the cooperative.
- Find out the development and adaptation strategies of the cooperative to the product consumption market (including approaches and application of new techniques/technology (for production, harvesting and post-harvest), plans production, future market assumptions, and adaptation strategies …).
- Assess the role of non-cooperative factors and factors in the success/difficulties of the cooperative, including interventions/supports from local authorities, financial institutions or NGOs.
3. Summary of research results
With a series of incentives on development policies, even forcing the organization of production/service provision in the form of cooperatives (e.g. New Rural Program), domestic market pressures (supply chains) increasing demand for high-end products), export market pressure (due to the expansion of opportunities to export Vietnamese goods to more demanding markets such as Europe, the US, Japan, etc.), the number of cooperatives has increased again. again in the last 5 years.
This study, with funding from DGRV, was carried out in 18 districts in 3 provinces: Son La, Da Nang and An Giang. The total number of samples approached is 258 cooperatives and the number of samples successfully interviewed reached 202. The content of the questionnaire was designed on the basis of ICA’s 07 cooperative criteria to assess the current status of cooperative organization and operation in Vietnam. Obviously, the ICA’s cooperative principles are very general, requiring many variables/information to be able to quantify the extent to which cooperatives have achieved these principles. While the reality in Vietnam shows that much information is obscured or even falsified, it seems impossible to quantify the level of achievement of the targets. On the basis of multi-dimensional analysis of the organization and operation of cooperatives, the research results have partly reflected the truth about the current status of cooperative organization and operation in Vietnam. about the degree of success of the cooperative as well as the cooperative principles of ICA being applied by cooperatives to varying degrees.
Due to the variety of production and service activities of cooperatives, to meet the requirements of statistical analysis (large enough sample), on the basis of collected information, cooperatives are classified into 04 groups: agricultural services. Industry, Manufacturing/processing, transportation/commercial/service and Multi-sector. According to this grouping method, there is a huge difference in the size and field of operation of cooperatives in the studied provinces. Cooperatives in Son La are smaller, newly established, and mainly focus on 02 fields: Production/processing and Multi-field. Most of the cooperatives in An Giang were established long ago, on a large scale, engaged in providing agricultural services or operating in many fields. In contrast, in Da Nang, cooperatives are more evenly distributed across fields of activity than in the other two provinces, with a large number of long-established cooperatives, and the largest scale among the three studied provinces.
According to the cooperative classification criteria proposed in this report, the number of cooperatives currently organized and operating is 69.3%. The remaining cooperatives, 30.7% are currently not operating/waiting for dissolution. The number of cooperatives operating at a good level reached 6.4%, and the number of cooperatives operating well was only 17.8%. Grade 1 cooperatives are highest in An Giang, reaching 70.3%, the lowest in Son La, reaching only 29.6%. Grade 2 and 3 cooperatives were highest in Son La, at 9.3% and 24.1% respectively, and lowest in An Giang, with only 4.7% for both groups of cooperatives. Although the group of production/processing cooperatives achieved the lowest percentage of class 1 cooperatives, they had the highest percentage of class 2 and 3 cooperatives compared to the rest of the cooperative groups, followed by multi-sector cooperatives, and very low in transportation cooperatives. loading/commercial/service. Recently established cooperatives have a higher success rate than converted cooperatives, partly indicating: smaller scale and greater ‘private’ nature, allowing cooperatives to operate flexibly and flexibly. more active, has contributed to the higher success rates of these cooperative groups.
The multi-dimensional analysis of the efficiency of the organization and operation of cooperatives carried out in this paper has partly helped to assess the current situation of cooperatives in Vietnam. The variety of types of cooperatives, production activities and service nature shows that the criteria for evaluating cooperatives in Vietnam need some specific differences. For example, an irrigation cooperative would not be able to apply democratic and voluntary criteria to all members. The transport cooperative will not be able to control the member’s activities if the member only registers to join the cooperative to obtain a business license, but separates to operate independently. Other acts such as personal profiteering of members of the Board of Directors, delay in paying irrigation fees, quietly abandoning the cooperative of members… even though they are few, they are still present and negatively affect the organization and operation of the company. cooperatives. If the cooperative is autonomous, it is possible to invoke the courts to decide right and wrong in these cases of internal conflicts, but this is not feasible in most cases occurring in cooperatives. Therefore, unlike the ICA’s principle of autonomy, in the current conditions, the government’s intervention: quickly and effectively – for the wrong behavior of cooperative members is necessary, contributing to the direction of the cooperative members. activities and commitment/voluntariness of members according to and for the common development goals of the cooperative.
Besides, with the current characteristics of Vietnam: small production land fund, dense population, pressure from market risks, resource degradation and climate change increasing, development promotion/incentive policies Cooperative in recent times is the right and necessary direction. However, government interventions on cooperative activities need to be better institutionalized and more reasonable, contributing to helping cooperatives develop towards greater autonomy in the future – an important condition that determines the success of the cooperative – instead of continuing to depend on the incentives and interventions of the government, as well as the inability to face the non-common motives of a part of the cooperative members as it is today.
4. Contacts
Contact the research team for the full product reference of this research activity.
| Author | Address | Tel | |
| Dr. Phạm Van Hoi | Center of Agricutural Research and Studies, VNUA | +84988827711 | phamhoi@gmail.com |
| Dr. Nguyen Van Phuong | Faculty of Accounting and Business Management, VNUA | +84982034025 | phuonglangvan@gmail.com |
| MBA. Vu Thi Hai | Faculty of Accounting and Business Management, VNUA | +84912340515 | vuhaike@gmail.com |
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