Policies are many but lacking in concentration - Resources are few and scattered

Global competition in economy and trade is increasingly fierce upon following the movement of Industry 4.0. People’s standards and policies of countries around the world are becoming more strict. Farm household economy is small and fragmented. Difficulties in the production of non-standard goods make it difficult for the industry to gain a firm foothold, develop, and compete in domestic and world markets. 

Cooperation therefore becomes an inevitable path for joint development. The collective economy sector must take the role of leading individuals, small production households and cooperative groups to form a production value chain large enough to compete in world markets and bring benefits to fellow members.

Sharing with Vietnam Agriculture News about limitations and shortcomings of the agriculture economy in this current context, Mr. Le Duc Thinh, Director of the Department of Cooperatives and Rural Development (DCRD - MARD), said that current mechanisms and policies to support collective economic development especially in the field of agriculture are showing three groups of limitation:

Firstly, Vietnam has many policies for agriculture support, but they lack concentration, focus, and specific key points. The capital is not only small but also scattered. The organization and implementation of those policies is not well-performed which results in low efficiency.

Secondly, a number of policies that are considered the “backbone” and play an extremely important role in the development of cooperatives have not yet met practical requirements and show limitations.

Some prime examples include policies on land in service of the construction of infrastructure and facilities for production, preliminary processing, processing and trade; policies to encourage agglomeration, plot exchanges, and land accumulation; policies concerning cooperatives’ access to credit; policies on agriculture insurance; or policies on professional training.

Thirdly, administrative procedures for the collective economy sector to receive support from policies are still not clear and only suitable for business objects.

By the end of 2021, Vietnam has over 27,000 cooperatives, 2.5 times higher than in 2001. The cooperative model attracts nearly six million members and creates jobs for approximately one million laborers. Its revenue and profit have gradually increased over the years.

The average income gap between regular workers and those in the enterprise sector has been narrowed. The average income of regular workers increases from VND 44.6 million/person/year (equal to 44.8% of the income of workers in the enterprise sector in 2017) to VND 52.8 million/year.

Accumulate new assets in order to develop

After 20 years of implementing Resolution 13 No. 13-NQ/TW on collective economy, the number of agro-cooperatives increased by 12,569, an average increase of 800 each year. Particularly in the 2016-2021 period the increase is three times higher compared to the previous period.

By the end of 2021Vietnam has 34,871 agro-cooperative groups and 18,327 agro-cooperatives, accounting for nearly 70% of the total number of cooperatives in the country. At present 2,297 agro-cooperatives have established enterprises in cooperatives, and 2,200 agro-cooperatives apply high technology and digital technology in production.

More than 4,339 agro-cooperatives take part in agro-product underwriting works, equal to 24.5% of the total number of agro-cooperatives. One thing to note is that the rate was only 5-7% before 2015.

According to Mr. Le Duc Thinh, with limited resources, future policies must identify and focus more on the collective economy sector specifically agriculture economy and agro-cooperative. “This is not a story of discrimination. If we want to build a rural area that brings great welfare to the people while spreading the highest influence, policies need to overcome the current situation of fragmentation."

The Director of the Department of Cooperatives and Rural Development also said that policies must support cooperatives to accumulate assets. State support must become a collective asset, thereby helping cooperatives grow, develop, improve operational and production efficiency, as well as strongly attract the attention and investment of businesses.

Translated by Samuel Pham