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VietNamNews

Agricultural co-operatives struggle for viability

Update: February, 25/2012 - 09:33

HA NOI — Fifteen years after Viet Nam'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 Ha Noi yesterday 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 produced about 7 per cent of their own fertiliser needs and about 13 per cent of seed needs, while private farming enterprises provided 52 per cent and 43 per cent respectively.

He said the inefficient operation of co-ops was often because local authorities were not well aware of the value the model could 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 had limited management skills. Statistics from the Viet Nam Co-operative Alliance show that more than 30 per cent of co-op leaders did not have a high-school diploma. Few of them had ever received professional training.

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

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

But this was not always true. Evergrowth Co-operative of dairy farmers in southern Soc Trang Province earned net income of more than VND3.5 billion (US$166,700) 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 was of crucial importance for co-ops, adding that training was 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. – VNS

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