PROJET AID-COOP

PROJET AID-COOP

FINAL REPORT

Hanoi,15/10/2010

‘‘INSTITUTIONAL SUPPORT FOR THE DEVELOPMENT OF

COOPERATIVES (COOP) IN NORTH VIETNAM”

PROJET AID-COOP

PROJET AID-COOP

PROJECT OVERVIEWDonors: EU, AFD Implementer: GRETDuration: 2007 – 2010Key Partner: DC – MPILocations: Vinh Phuc, Phu Tho & Ninh Binh, (3 districts/province – focus on poor ones)

Local Partners: Provincial People’s Committee, DPI, DARD, WU, FU, Coop Alliance – Leading agency, Advisory Coops

Target Beneficiaries: Local Coops, Coop groupsOther beneficiaries: Local authorities (District and commune levels)

PROJET AID-COOP

PROJET AID-COOP

PROJECT OVERVIEWObjectives:

1: Strengthen civil society through establishing new Coops in agricultural sector.

2: Strengthen civil society by building up a new cooperative model: advisory Coop.

3: Enhance Coop sector, contributing to the development of household and large-scale enterprise economy.

4: Reduce proverty by facilitating the poor in the three project provinces have best chances to access agricultural support services.

PROJET AID-COOP

KEY ACTIVITIES AND OUTCOMES

I. Support perfecting the legal frame and central-level policies II. Support institutions at local level

PROJET AID-COOP

Support perfecting the legal frame and central-level policies

A. Background

B. Perfecting a legal frame

C. Intervention: legal-related activities

PROJET AID-COOP

A. Background

Mitigate legal framework ties

A Coop is popularly understood as:

+ either an assistant of local authorities, this understanding results from negative effects of the old-type Coop. (An agricultural Coop acting as a Cooperation of the whole commune with above 1.000 members)

+ or an enterprise managed by an individual whose capital contribution occupies the majority of the enterprise’s capital while its members are employees who have no voice and right of real decision making.

A definition by ILO and ICA: - A Coop is an autonomous association of persons united voluntarily to meet their

common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.

PROJET AID-COOP

Constraints of Coop Management System

A cumbersome management structure(MPI assists the Government to solidate Coop management activities on nationwide while other Ministries manage Coops based on the businesses which they are responsible for; the Coop alliance acts as the representative and protect rights and obligations for Coops)

Not consistence in understanding the nature of a Coop

PROJET AID-COOP

STRUCTURE OF STATE MANAGEMENT ON COOPs

PROJET AID-COOP

Training Policies offered to poor-managed Coops

• Budget lines for trainings allocated in a cumbersome procedures through Coop alliances of provinces;

• Regulations on budgets for trainings much lower than the market level, eg. cost for senior professors only ranges from 150.000 dong to 200.000 dong/section

• Trainings: high quantity but low quality (lack of appropriate approaches, good contents, etc.)

Low effectiveness in using State budgets

PROJET AID-COOP

B. Perfecting a legal frame

Promote dissemination activities on international regulations, laws and legal documents regarding Coop

• Organize 19 Seminars to introduce Coop law and international lessons to 776 staff and local population

• Hold 9 trainings at province/district levels for 390 staff and local population

• Compile 3 legal handbooks regarding following areas: Coop Establishment Process, Organization and Operations; Support policies

• Help Department of Coop – MPI publish books on new-type Coops

PROJET AID-COOP

Amendment on Coop Law issued 2003 to strengthen the legal framework

Facilitating Coops acting as an independent economic entity and easily accessing global markets => Support law reform

• 2 surveys organized in 8 provinces in Mekong delta and 5 Northwest provinces with participation of 17 officials of Department of Coop and Government bodies

• 2 seminars at national level to introduce and discuss Coop law Draft with attendance of 134 delegates from central bodies and provinces/cities

• 7 normative legal foundations regarding: Coop Development, Role of local authorities, training and land policies, credit, tax and support – advisory Coop.

PROJET AID-COOP

Amendment on Coop Law issued 2003 to strengthen the legal framework

• Access international values and standards => Policy researches, study trips, seminars

• Translate Coop laws/acts of other countries

• Synthesize and compare different Coop models of Vietnam, France, Canada, Philipin and Thailand

• Organize 3 study trips to learn international lessons from Korea, Singapore and Indonesia for 15 officials of Department of Coop – MPI and Government bodies.

PROJET AID-COOP

C. Interventions: legal-related activities

Project facilitated discussions at central level about amendment on the legal framework regarding Coop sector

Project helped strengthen legal recognition of local population and authorities on Coop Law 2003

Better understanding of legal regulations on Coop helps Coop members more willingness and self-confident in cooperation approaches

Registration procedures of Coops and Coop groups have been easily settled thank to the fact that local authorities understand the law better

PROJET AID-COOP

II. Building & supporting institutional systems at local level

A. Coordination Mechanism among agencies managing Coop sectorA1. Context

A2. Establishment of a Coordination CommitteeA3. Impacts of Support mechanism: Coordination Committee

B. Credit support policyB1. Context

B2. Creation of Turnover FundsB3. Impacts of Support mechanism: Turnover Funds

C. Capacity buiding for Coops/Coop GroupsC1. Context

C2. Capacity building: Trainings – EducationC3. Impacts of Trainings – Education: Raising awareness

D. Support – Advisory mechanismsD1. Context

D2. Improving Support – Advisory mechanismsD3. Impacts of Support - Advisory mechanisms

PROJET AID-COOP

Building institutional systems at provincial level

Support Mechanism Map at Provincial level

Finance MechanismRevolving fund

Coops/Coop Groups

Support – Advisory MechanismLocal Advisory organizationsConsultantsCoops/Coop Groups

Cooperation MechanismProvincial Coordination Committee – Multi-actors

Training MechanismProvincial LevelLocal level

)Coops/Coop Groups(

PROJET AID-COOP

A. Coordination Mechanism among agencies managing Coop sector

A1. Context: Existing constraints

• Inconsistence in regulations on leading State agencies responsible for Cooperative management: this function is assigned to different agencies from DPI, DARD to Provincial Coop Alliances – not a body to perform State management on Cooperatives)

• Lack of an effective coordination mechanism among relevant agencies

• Authorities (People’s Committee) fails to perform some functions as stipulated by the law

PROJET AID-COOP

A2. Establishment of a Coordination Committee at provincial level

• Coordination Committee with presence of members from People’s Committee, DPI, DARD, Woman Union, Farmer Union and Cooperative Alliances, established by the Project and its activities :

- Organize trainings on building capacity and raising awareness of Cooperative Law for 409 provincial officers

- Hold workshops to share experience in cooperative development in Thai Nguyen with the attendance of 50 provincial officers and cooperative representatives

- Set up websites and database as a reference for Cooperative alliances (information-rich portals, policies, and documents ragarding cooperative sector as well as findings and lessons learnt from the project)

- Assist Cooperative alliance to publish Collective – economy articles

PROJET AID-COOP

A3. Impacts of Support mechanism: Coordination Committee

• Foster the existing relationship among member agencies of the Coordination Committee

• Mobilize involvement/participation of all stakeholders to further improve the cooperative sector

PROJET AID-COOP

A3. Impacts of Support mechanism: Coordination Committee

• Local authorities (People’s Committees at all level) pay more attention to the development of cooperative sector:– Approve principles of the revolving fund and improve fund deployment

approaches: contribute their capital to Funds founded by the project– Highly appreciate the role of Cooperative Alliances and better

recognize great benefits from providing assistance and consultancy services to the development of Coops

– Create favourable conditions for newly-established Coops– Offer a number of new preferential policies to Coops established by

the project (in Yen Khanh - Ninh Binh), eg. Mushroom growing Cooperative in Yen Khanh-Ninh Binh

– Peopel’s Committee of Ninh Binh asked Cooperative Alliance to design a strategy to promote the development of Coops

– Woman Union of Vinh Phuc gets involved in creating new Coops

PROJET AID-COOP

B. Credit support policy B1. Context: Barriers against Coops to access credits• Coops hardly get bank loans due to:

- lack of collaterals - poor capacity of designing project proposals and business strategies

• Limited local funds to aid Coops:+ Ninh Binh: no Funds for Coops+ Phu Tho: a Fund of 2 billion dong

• No preferential credits for Cooperative Groups

PROJET AID-COOP

B2. Creation of Turnover Funds (1/3)

• A turnover fund/province was established with transparent statutes and user manuals.

• Charter capital of turnover Funds:

• Every province has its own Fund Management Council comprising of representatives of Coop Alliance and Advisory Coops, 2 members of Coordination Board => Advisory Coops – a new model in Vietnam and its membership includes officials from State agencies at provincial level and other civil society organizations

Provinces

Turnover Funds financed by the project (vnd)

Reciprocal Capital(vnd)

Ninh Bình 1.050.000.000 500.000.000

Phu Tho 1.050.000.000 300.000.000

Vinh Phuc 690.000.000 350.000.000

Total 3.940.000 (vnd)

PROJET AID-COOP

B2. Creation of Turnover Funds (2/3)

• Target groups: Coops and Coop Groups• Loan duration: 1-2 years• Interest rate: 0,7%/month• Loan amount: 25 - 70 million/project• Flexible collaterals• Simple procedures

PROJET AID-COOP

B2. Creation of Turnover Funds (2/3)

• 4 – 5 Calls for proposals per province• Trainings on skills of project design for 305 officers

from Coop Alliances and local Coops/Coop groups• Consulancy and Support of Procinvial Coop

Alliances, and Advisory Coops offered to Coops/Coop Groups to submit their project proposal

• Communications: leaflets, posters, TV & radio reports

• “Mico-Credit deployment handbook“ 80 Coops/Coop Groups accessed a loan of 4,2 bil

PROJET AID-COOP

B3. Impacts of Support mechanism: Turnover Funds

• Provincial Coop Alliances seize Fund procedures and management

• Provincial Partners (People’s Committee, Coop Alliance) raise their great concern and contribute their capital to Funds

• 80 Coop Groups/Coops have been facilitated to access loans at low interest rate

• Some new products (mushroom, chicken, pig, etc.) have been developed both in size and quality.

• Some services (waste and environmental hygiene fee) serving social welfare have been emerged

• New equipments and supplies have been purchased (feed, veterinary medicines, etc.)

• A number of new jobs have been generated.

PROJET AID-COOP

C. Capacity buiding for Coops/Coop Groups C1. Context: Capacity and awareness limitation among

Coop officers • By the end of 2007, nation-wide there are  :

+ 1.655/5.542 untrained management heads (accounting for 30%)+ 4.348/13.938 untrained cooperative directors (accounting for 31.2%)

• In 2009, the percentage of managerial officers classified based on education:+ Collega and Post-graduate: 6,87%+ Vocaltional Training, Technical workers and Unskilled labor: 60%

- False awareness of residental people about Coop, which is still affected by the obsolete model

- Lack of understanding about Coope and Coop Groups

The cooperation demands do exist among people but there is no organization to group them up

PROJET AID-COOP

C2. Capacity Building : Trainings and Education

• 5 surveys on the demands for training among professional bodies and cooperative members

• Capacity building trainings for 469 Coop and Coop Groups from 3 provinces within project scope, as many as 2987 people received training

Applying participatory approaches Varied topics: Laws, Accounting, Marketing,

Business planning, IT, management and leadership skills, etc.

• 20 competent trainers have been successfully trained

• Field trips and study tours organized

PROJET AID-COOP

Publications – Documents

• Training documents

(Accoungting, TOT, Leaderships & Management skills, etc.)

• 3 Legal Handbooks • 3 websites to introduce activities and

operations of Coops in 3 project provinces

PROJET AID-COOP

C3. Impacts of Trainings – Education: Rasing awareness (1/2)

– Awareness over the importance of understanding laws, accounting, management and market research & development

• Law• Accounting principles • Institution/Organization Analysis • Adaption to markets (catching new market demands and

show satisfying capacity to the markets)

PROJET AID-COOP

C3. Impacts of Trainings – Education (2/2)

• Strengthen competency of members

• Build and promote brands

• Seek for and select potential customers

• Replace obsolete trading methods to innovative ones

• Enhance strengths and make good weaknesses

• Apply objective-oriented business strategies

• Refer to cooperative members’ ideas for financial management

PROJET AID-COOP

D. Support – Advisory mechanisms D1. Context: Lack of a Support – Advisory mechanism

• Increasingly demands for consultancy services among local people

• Limitted capacity of providing consultancy servies of Coop Alliances

• Lack of State budget lines for establishment of new Coops

• Only State and local budget lines offered to trainings and education to Coop officers

PROJET AID-COOP

D2. Improving Support – Advisory mechanisms (1/3)

1. Consolidate new advisory Coops Enhance competence of existing Coops such as HaDevA,

Corudes, Red River Advisory Centre + Nho Quan Farm joint stock Coop + Consultant Groups in Yen Khanh – Ninh Binh through Trainings, Seminars, and Direct consultancy services provided by project experts

Engage involvement of civil society organziations in Coop sector: play key roles in Fund management, provide consultancy, participate in field trips and establishment of Nerad network

Products: Handbook “A guide on building and developing cooperative economy”

PROJET AID-COOP

D2. Improving Support – Advisory mechanisms (2/3)

2. Provide consultancy in establishment of new-type Coops/Coop Groups

- Investigate demands among local people

- Assist 10 newly-established Coops and 25 Coop Groups

- Help set up Coops for raising poultry in Tam Duong – Vinh Phuc

- Establish a network of Coops for jointly growing mushroom in Yen Khanh – Ninh Binh, comprising of 11 Coop Groups

PROJET AID-COOP

D2. Improving Support – Advisory mechanisms (3/3)

3. Post-set up assistance• Direct and regular support provided by

Advisory Coops: create plans, promote brands, etc.

• Technical trainings and capacity building to improve productivity of Coops/Coop Groups (7 technical trainings)

• Seminars with attendance of multi-actors: local authorities, Coops/Coop Groups and entrepreneurs

PROJET AID-COOP

D3. Impacts of Support - Advisory mechanisms (1/2)

• Positive changes Advisory Coops made Better ability of providing consultancy service of Advisory Coops, Nho

Quan Coop and Consultant group in Yen Khanh – Ninh Binh

– A wider range of fields (law, IT, Management, business strategy

making, project design skills, etc.)

– Better adaption to institutional networks

– Better recognition from different stakeholders

– 4 consultancy contracts and 11 training contracts with authorities at

district/commune levels

– New initiatives proposed by consultants in Ninh Binh for a new

Advisory Organization

PROJET AID-COOP

D3. Impacts of Support - Advisory mechanisms (2/2)

• Achievements Coops obtained:

- New Coops’ operations in accordance with the nature of a Coop

- & respecting for cooperation principles

– Better attention paid to Coop members (providing more services)

PROJET AID-COOP

Thank you very much for your attention!