COVID-19 pandemic promotes the role of cooperatives

As a result, small-scale farming households and traders are facing difficulties regarding transportation. Especially, with a huge amount of unsold farm produce, a “rescue” for the products is needed to relieve their loss.

The story of eggs, fish and other produce remain unshipped and unsold in abundance in Hai Duong, several days after Tet (Lunar New Year) holiday was a typical example.

This highlighted the importance of cooperatives.

Without the cooperatives, farmers will feel lonely in accessing the market.

Prime Minister Nguyen Xuan Phuc has said collective economy is an inevitable trend during Vietnam’s efforts for global integration,

In his remarks at the 6th Congress of the Vietnam Cooperative Alliance for tenure 2020-2025 held in December last year, he urged government agencies and provinces/cities to identify the development of collective economy and cooperatives as an inevitable trend. It’s also one of the priority tasks of the entire political system, saying solutions should be set forth to strengthen

Cooperatives make up an essential part in the economy, contributing to maintaining socio-political stability, implementing social progress and equity, he said.

“The development of a collective economy should only come from the needs of the people and  in line with the objectivity rule of the market economy,” the PM said.

The issuance of Cooperative Law has created a legal corridor for the development of cooperatives.

By the beginning of this year, Vietnam has an estimated of over 26,000 cooperatives, 100 cooperative unions and 119,000 cooperative groups, which attract 8.1 million members and create jobs for 2.2 million others.

Of these, there are some outstanding cooperatives including High-Tech Forestry Cooperative in Phu Yen Province, Phuoc Tin Agricultural Cooperative in Quang Ngai Province, Tan Thong Hoi Dairy Cow Cooperative  in Ho Chi Minh City and Anh Dao Cooperative in Lam Dong Province.

It should be noted that small holder farmers will face more difficulties as Vietnam is gradually transforming its development model into a full market economy.

In the coming time, Vietnam is committed to fulfilling its obligation under various free trade agreements that the country is part of, including requirements for food safety and quality.

Growing competition in both domestic and international markets would put farming households under serious disadvantages. As such, new-style cooperatives would be the solution to ensure their sustainable income.

According to Nguyen Van Doan, head of Cooperative Development Agency under the Ministry of Planning and Investment, the development of collective economy does not only contribute to the country’s economic growth but also make an important contribution to socio-cultural development, community activities to adapt to climate change, mitigate the effect of natural disasters and epidemics as well as promote the strength of members and households.

“It will enable large production, social stability and sustainable development," he said.

Doan said the core issue of the cooperative is to bring together producers to have products that meet domestic consumption and export requirements.

When the cooperatives were developed, it would be easier for their members and farmers to regularly access capital, technical knowledge and market, he added.

A lot of effective new-style cooperatives have emerged in the Mekong Delta after the Prime Minister issued a Decision No 445/TTg regarding a pilot project on the completion and the expansion of new-style cooperatives in the region in the 2016-2020 period.

To promote the development of value chains for Vietnamese cooperatives, Dao The Anh, Deputy Director of Vietnam Academy of Agricultural Sciences, said it was necessary to have favourable policies to attract investment in the agricultural cooperative.

Attention should be paid to attracting high quality human resources, investing in branding building, setting up a linkage between market, production and processing in line with the requirement of export markets.

In the past, cooperatives tended to be passive, depending on higher level direction and Government subsidies but now they have to adapt to the new market environment, he said.

“It’s time for competent agencies to accomplish mechanisms and preferential policies to push up the development of collective economy and cooperatives relevant to new situations,” Anh said.