Development of New Agricultural Cooperative in Vietnam.

1. Trung t©m Nghiªn cøu & Ph¸t triÓn HÖ thèng N«ng nghiÖp
Centre for Agrarian Systems Research & Development
Development of New
Agricultural Cooperative in
Vietnam
PhD. Dao The Anh
(PHANO and VAAS)
Bangkok, 11/9/2015

2. Family farming in Viet nam
 Equitable access to land for
all household since 1988
 Family farms with 10.3 millions unit
 Succesful Green Revolution
 Irrigation
 High yield varieties, high land rotation
 High chemical input use
 Food security: 70% rice
 Agricultural Exportations: rice,
coffee, pepper, rubber, tea, cashew,
fish, shrimp, fruit and vegetables …

3. Small Farm agri-land dominant in
Vietnam, 2011 (%)
< 0.5ha,
50.7%
0.5 to
2ha,
30.4 %
2 to 5ha,
9.6%

4. Facing challenges of family farming:
market access and competitiveness
 Intensification
 Exportation
 High chemical input and
resource cost
 High emission
 Low quality and farmer’s
income
 Lack of Value chain
institutions and farmer’s
organization

5.  Agriculture growth and high value: competitiveness
and contract farming in Value chain
 Diversification for poverty Reduction and farmer
income driven
 GHG Emission reduction and adaptation
New Vision for Agricultural
Restructuring Policy

6. Necessary for MARD to develop
Agricultural Cooperatives
Agricultural
restructuring
New business
cooperatives
models
Policies
Agricultural cooperatives improve Farmer’s Competitiveness
Real
demands
Contract farming

7. Cooperative legal environment changing fast
 Building legal frameworks
 Cooperative law in 1996
 Cooperative law in 2003
 Cooperative law in 2012 : new cooperative type
 Decree 151/2007/NĐ-CP about Collaborative groups
 Decree 193/2013/NĐ-CP: guidance of Coop Law 2012
 Cooperative policies
 Cooperative law in 2003 (Article 3; Decree 88/2005/)
 Cooperative law in 2012 (Article 6; Decree 193/2013/,
Decision 2261/ Decision Prime-minister on 15/12/2014)

8. Slow change of cooperative situation
Source: Department of cooperatives and rural development – MARD, 2014
 Increasing number of cooperatives,
from 9.628 (2012) to 10.500 (2014)
 144 000 collaborative groups raising
 6,7 million of cooperatives members,
in average 660 members/cooperative
 92% of agricultural service
cooperatives
 10% of Agricultural cooperatives
operated effectively under new Law
 Low profit and revenue
Agriculture
cooperativ
es 92%
Forestry
cooperatives
1%
Fishery cooperatives
6%
Salty
cooperatives
1%

9. Name of services provided by AC % of AC providing the service
Irrigation 80
Plant protection 55
Veterinary 23
Seed 53
Materials 30
Extension 87
Land preparation 20
Marketing and processing 8.6
Electricity 5.8
Internal credit 8.2
Services provided by Agri-Coop
(5552 cooperatives are surveyed in 2012)
% of AC providing the listed services

10. Services used by farmers from agri-cooperative and
farmer groups
Unit: %
Source: OXFAM, 2014Surveys from 60 households in Ninh Binh,
Lam Dong và Dong Thap, 2014

11. Education level of agricultural cooperative
chairman (%)
14.05
28.43
2.68
14.72
40.12
Primary
Secondary
College
University
Untrained

12. Institutional challenges of
Agri-Cooperatives
 Inconsistent perceptions of Cooperatives: fast change of the law, lack of
participatory consultation in law building
 State management apparatus of cooperatives lack of capability
 Law guidance documents issued slowly
 Some localities managed cooperatives incorrectly
 Lack of consultancy service in cooperatives (establishment,
management) in local and business linkage
 Lack of training new type of cooperatives leadership and business
capabilities
 The mechanism of credit and land access for cooperatives is limited
 The tax regime is not reasonable for new coop
 Support policies measures have not enabling for favorable environment
for the starting of coop business, but mainly input supports by financial
cover

13. What is Fao supports?
FAO project GCP/RAS/276/IFA and
TCP/RAS/3405 “Pro Poor Policy Approaches to
Address Risk and Vulnerability at the Country
Level” will help:
 initiate policy action to enable smallholder farmers
to cooperate and organize along the value chain,
 mitigating the new emerging market risks
occurred in the rapid global economic integration.

14. MARKET and
Value chain
COOPERATIVE
Capital contribution
Support services to
member
Input and output market
General demand in services and competitiveness
owner
Customer
Memb
er
Memb
er
Memb
er
Memb
er
Memb
er
New Agri-cooperatives model:
MARD drafting Agricultural Cooperative Decree
01/08/2016 14

15. Fao Pro-poor policy support Mard for
Agricultural Cooperative promotion
 Training WS for AC Decree drafting Committee
 Consultation WS for AC Decree drafting
 Policy Brief: policy recommendation for AC
 Setting up the network of national and
international AC experts for Coop capacity
building and advisory service
 Joint effort with Farmer’s organization leader
Forum in Viet nam (Mard, Phano, OXFAM)

16. Policy recommendation
for New Agri-Coop in Vietnam
For Cooperative Law and related legal docs:
1. Use internationally accepted typology in by
service in value chain and give enterprise status
2. Keep cooperators flexible and autonomous
3. Ease registration process: one stop shop service
4. Simplify and unify legal documents
5. Current practice of land policy and land-use
planning: facilitation of access for coop

17. Policy recommendation
for New Agri-Coop in Vietnam (2)
For Agricultural Cooperative Decree Draft:
 Clear criteria and procedures for financial support for
agricultural sector
 Avoid crowding out private sector actors: in price and
quality
 Keep typical public or communal services separate from
tasks of new cooperatives: by contract
 The New versus The Old: equal support, based on
business plan
 The Large versus the Small: consider also Collaborative
groups
 Young farmers program

18.  Cooperative leadership training: business
and marketing
 Win public support new type of cooperative
model: media, education
 Specify coordination of state management,
advisory and training service and audit
 Unitary taxing: exemption for starting
 The State encourages the establishment of a
Farmer’s Organization Forum
Policy recommendation
for New Agri-Coop in Vietnam (3)

19. Thank for attention!