Agricultural co-operatives struggle for viability

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

This comment was made at a workshop in Hanoion Feb. 24 by the director of the Southern Centre for Support andDevelopment of Co-operatives and Small and Medium Enterprises, Le BinhHung.

He said agricultural co-operatives should take theinitiative to raise competitiveness in the marketplace as well ashelping 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 fertiliserneeds and about 13 percent of seed needs, while private farmingenterprises provide 52 percent and 43 percent respectively.

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

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

She said they also havelimited management skills. Statistics from the Vietnam Co-operativeAlliance show that more than 30 percent of co-op leaders do not have ahigh-school diploma. Few of them has ever received professionaltraining.

In addition, most members of farming co-ops arepoor and have little knowledge of economics. The benefits of joining areoften 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 farmersin southern Soc Trang Province earned net income of more than3.5 billion VND (166,700 USD) last year.

Meanwhile, Hungsaid co-ops should be less dependent on external assistance and take theinitiative in developing production, seeking customers, building theirbrands and expanding their markets.

He said tradepromotion is of crucial importance for co-ops, adding that training isalso important to raise the capacity of officials, enhance theapplication 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 alltypes with over 12.5 million members. More than 6,000 are involved inagriculture. /.

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