Trung t©m Nghiªn cøu & Ph¸t triÓn HÖ thèng N«ng nghiÖpCentre for Agrarian Systems Research & Development

Development of New Agricultural Cooperative

in Vietnam

PhD. Dao The Anh (PHANO and VAAS)

Bangkok, 11/9/2015

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 …

Small Farm agri-land dominant in Vietnam, 2011 (%)

< 0.5ha, 50.7%

0.5 to 2ha, 30.4 %

2 to 5ha, 9.6%

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

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

Necessary for MARD to develop Agricultural Cooperatives

Agricultural restructuring

New business cooperatives

models

Policies

Agricultural cooperatives improve Farmer’s Competitiveness

Real demands

Contract farming

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)

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 co-operatives 92%

Forestry coopera-

tives1%

Fishery coopera-tives6% Salty coopera-

tives1%

Name of services provided by AC % of AC providing the serviceIrrigation 80Plant protection 55Veterinary 23Seed 53Materials 30Extension 87Land preparation 20Marketing and processing 8.6Electricity 5.8Internal credit 8.2

Services provided by Agri-Coop(5552 cooperatives are surveyed in

2012) % of AC providing the listed services

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

Education level of agricultural cooperative chairman (%)

14.05

28.43

2.68

14.72

40.12

Primary

Secondary

College

University

Untrained

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

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.

MARKET and Value chain

COOPERATIVE Capital contribution

Support services to member

Input and output market

General demand in services and competitiveness

owner

Custom

er

Member

Member

Member

Member

Member

New Agri-cooperatives model: MARD drafting Agricultural Cooperative

Decree

01/05/2023 14

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)

Policy recommendation for New Agri-Coop in VietnamFor 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 autonomous3. Ease registration process: one stop shop service4. Simplify and unify legal documents5. Current practice of land policy and land-use

planning: facilitation of access for coop

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

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)

Thank for attention!