Monday, August 21, 2017 - 13:54:33

Agricultural co-operatives struggle for viability

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Fifteen years after Vietnam 's first laws governing co-operatives came into effect, the agricultural model has failed to develop its full potential.

This comment was made at a workshop in Hanoi on Feb. 24 by the director of the Southern Centre for Support and Development of Co-operatives and Small and Medium Enterprises, Le Binh Hung.

He said agricultural co-operatives should take the initiative to raise competitiveness in the marketplace as well as helping reduce poverty and create jobs and social security.

"Co-op farm production is often not in line with the demands of either its members or the market," he said.

Hung said co-ops only produce about 7 percent of their own fertiliser needs and about 13 percent of seed needs, while private farming enterprises provide 52 percent and 43 percent respectively.

He said the inefficient operation of co-ops is often because local authorities are not well aware of the value the model can provide.

According to deputy director of the Ministry of Planning and Investment's Co-operative Department, Phan Thi Thanh Ha, at present co-ops receive little support from the Government in terms of tax, credit, training and audits.

She said they also have limited management skills. Statistics from the Vietnam Co-operative Alliance show that more than 30 percent of co-op leaders do not have a high-school diploma. Few of them has ever received professional training.

In addition, most members of farming co-ops are poor and have little knowledge of economics. The benefits of joining are often unclear to them, limiting their contributions.

Operating principles and fair distribution of responsibilities will help ensure the efficiency of operations, Ha said.

But this is not always true. Evergrowth Co-operative of dairy farmers in southern Soc Trang Province earned net income of more than 3.5 billion VND (166,700 USD) last year.

Meanwhile, Hung said co-ops should be less dependent on external assistance and take the initiative in developing production, seeking customers, building their brands and expanding their markets.

He said trade promotion is of crucial importance for co-ops, adding that training is also important to raise the capacity of officials, enhance the application of technology and improve productivity.

"Promoting member's participation is the key to economic success," he stressed.

Throughout the country, there are nearly 19,000 co-operatives of all types with over 12.5 million members. More than 6,000 are involved in agriculture. /.
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