Deputy PM calls for review and improvement of value chain mechanisms

Deputy Prime Minister Le Minh Khai has called for a thorough review of mechanisms and policies to address challenges facing the collective economy and cooperatives, while fostering sustainable development and strengthening linkages within product value chains. 

Speaking at the National Co-operative Forum this week, Deputy Prime Minister Le Minh Khai stressed the importance of upgrading human resources to support the growth of the collective economy and co-operatives, in particular by establishing and strengthening special centers for raw material procurement.

Deputy Prime Minister Le Minh Khai addresses the forum. Photos: dangcongsan.vn

He emphasized that the government always encourages and creates favorable conditions, as provided by law, for the rapid and sustainable development of the collective economy and cooperatives.

The collective economy and cooperatives have partly overcome long-standing weaknesses and increasingly demonstrated their role in developing household economic activities, ensuring social welfare and political stability at the grassroots level, and making direct contributions to the country's economic growth, Khai said.

By the end of 2023, the country had more than 31,000 cooperatives with more than 5.8 million members and 137 cooperative alliances. Approximately 63% of cooperatives were assessed as operating effectively. Cooperative products are becoming more diverse and abundant. Under the One Commune One Product (OCOP) Program, there are over 5,300 cooperatives nationwide, of which 38.1% are cooperatives.

Many concentrated production areas and large raw materials areas have been formed, providing a vital base from which to apply scientific and technological advances to improve product quality and output.
However, the Deputy Prime Minister also pointed out several existing problems, such as the weak production and business capacity of cooperatives. The digital transformation of management, production and business is hampered by limited scientific and technological knowledge.
The number of cooperatives that have developed product brands is still limited, and their market competitiveness is weak. Internal linkages within cooperatives are  poor, and joint activities and linkages between cooperatives and other economic organizations are not widespread.
It was pointed out that only a few co-operatives have the capacity to organize effective links and act as an effective bridge, with the ability to spread the development of production according to the value chain.

Existing challenges and measures

Delegates visit a booth introducing key products at the event.

Statistics from the Vietnam Cooperative Alliance and the Ministry of Agriculture and Rural Development showed there are over 4,000 cooperatives participating in value chain linkages nationwide, accounting for nearly 13% of the total number of cooperatives.

In the agriculture sector alone, there have been 1,449 linkages established and developed for key products, involving the participation of 2,204 cooperatives, 1,091 businesses, 517 cooperative groups, and over 186,000 farmers.

The total approved budget for linkage projects is VND11.4 trillion ($455.4 million), of which the state budget support is VND2.5 trillion (99.9 million), accounting for 22.1%.

The participants of the forum agreed that there have been some results in linking members of collective economic organizations, cooperatives among themselves, cooperatives with enterprises, and others.

Agriterra Vietnam, a Vietnamese firm, is currently working with the Ministry of Agriculture and Rural Development, the Ministry of Planning and Investment, specialized organizations, platforms and enterprises, the Vietnam Cooperative Alliance and provincial cooperatives. The company also supports more than 30 partners and projects operating in 16 provinces and cities nationwide.
Le Thi Thu Hien, Director of Agriterra Vietnam, said the value chains supported by Agriterra Vietnam include four tea and four coffee cooperatives, two agricultural cooperatives, four aquaculture cooperatives and 26 rice cooperatives.
She shared the successful model of value chain linkages, giving an example from the Netherlands, adding that the factors for the success of cooperatives in the Netherlands include allowing different legal forms that are appropriate to the market and to the development needs of cooperatives. There are also cooperatives that develop on a multinational scale, such as FrieslandCampina, a multinational dairy cooperative in the Netherlands.
Nguyen Anh Duc, CEO of Saigon Co.op, the Union of Cooperatives in Ho Chi Minh City, said that the development of agricultural supply chains based on the collective economy combined with modern distribution systems has received special attention from the Party and the government.
He added that many regulations on collective economic development have been issued, including the Cooperative Law of 2003, the Cooperative Law of 2012, and most recently the Cooperative Law of 2023, which have created a conducive environment for the expansion of collective economic organizations and a more stringent legal framework tailored to the characteristics of Vietnam.
 
Le Van Viet, Chairman of the Board and CEO of the Xuyen Viet Cooperative (northern Hai Duong Province), suggested that an important link in the sustainable development of cooperatives is the establishment of an advisory board composed of academics, experts, and cooperative directors who can assist newly established cooperatives in product development and human resource management. Initially, this specialized advisory board should be piloted in key local cooperatives.

Trinh Van Cuong, Chairman of the Board of Vinh Cuong Agricultural Cooperative (southern province of Bac Lieu), said that when farmers participate in a value chain link, they feel secure because cooperatives take care of the input and output of their products.

Mai Van Khanh, Director of Tan Tien Cooperative (southern province of Lam Dong), suggested some solutions, including raising awareness among members, aiming for green and circular production, continuing to train and recruit qualified personnel, and building a waste recycling system.